• 한국중재학회지:중재연구
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• 제12권2호
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• pp.93-114
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• 2003

The Federal Arbitration Act and the States Arbitration acts of the United States approve that the an arbitration clause should be construed broadly and the Courts interpreted it broadly without being curbed by the written meaning of clause itself. The Courts also divided the interpretation of arbitration clause from the interpretation of other clauses of contract to approve the validity of arbitration clause and further expanded the scope of arbitration. However, the Arbitration Act of Korea does not specify a general principle about how an arbitration clause should be interpreted. The Supreme Court did not have a case yet but the lower courts kept their posture that an arbitration clause should be clear by resulting narrow interpretation and should be written to the extent that it excludes the power of courts from jurisdiction. As a result, there would be cases that arbitration is not permitted although an arbitration clause exists. The parties intending arbitration are frustrated about how to draft an arbitration clause into their agreement. There were the cases that the parties which took the prevailing position attempted to delay dispute resolutions by dragging disputes into litigation even if they agreed to resolve through arbitration, on the basis that an arbitration clause was incomplete. Although the arbitration statutes of the United States cannot apply in Korea, the way of their approaches to the interpretation of arbitration clause can be taken into consideration in view of the globalization of arbitration.

• 한국중재학회지:중재연구
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• 제12권2호
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• pp.303-336
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• 2003

Incorporation of an arbitration clause by reference to other documents occurs in many international business transactions. The reference is either to another document that contains arbitration clause or to trading rules which contain the arbitration clause, without the main contract mentioning that arbitration has been agreed upon. In fact, incorporation by reference in to a contract of an arbitration clause set forth in another agreement is deemed valid in any number of circumstances, even when the parties to the two contractual instruments are not the same. Difficulties arise when, instead of an express arbitration provision, a contract contains a clause which refers to the trading rules of a certain trade association, so-called external arbitration clause. The U.S. courts which will presume that the parties intended to arbitrate under a particular set of rules when they expressly mentioned arbitration in their agreement, have sometimes refused to enforce contract clauses that do no more than refer to particular trading rules, even if these rules contain provisions binding the parties to arbitrate their disputes. The courts in such cases tend to be careful in determinig whether intent to arbitrate is present. In maritime contracts, the arbitration clause in a charter party is often referred to in the bill of lading. Such reference usually is held binding upon the parties to the contract of carriage, their knowledge of such practice being presumed. A nonsignatory may compell arbitration against a party to an arbitration agreement when that party has entered into a separate contractual relationship with the nonsignatory which incorporates the existing arbitration clause. If a party's arbitration clause is expressly incorporated into a bill of lading, nonsignatories … who are linked to that bill … may be bound to the arbitration agreement of others. An arbitration clause in a charterparty will be incorporated into a bill of lading if either - (a) there are specific words of incorporation in the bill, and the arbitration clause is so worded as to make sense in the context of the bill, and the clause dose not conflict with the express terms of the bill; or (b) there are general words of incorporation in the bill, and the arbitration clause or some other provision in the charter makes it clear that the clause is to govern disputes under the bill as well as under the charter. In all other cases, the arbitration clause is not incorporated into the bill.

• 한국중재학회지:중재연구
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• 제12권2호
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• pp.263-302
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• 2003

Since new Korean arbitration law was modeledafter UNCITRAL Model Law on International Commercial Arbitration Law, the judicial review on the arbitral award is at most limited to fundamental procedural justice. Thus, drafting valid arbitration clause is paramount important to enforce arbitral awards in the new legal environment. A losing party in arbitral process would often claim of the invalidity of arbitration agreement to challenge the arbitral award. Especially, the validity of arbitration clause in the construction contracts is often challenged in Korean courts. This is because the construction contracts usually include selective arbitration agreement in multi-tiered dispute resolution clause that is drafted ambiguous or uncertain. In this paper selective arbitration agreement means a clause in a contract that provides that party may choose arbitration or litigation to resolve disputes arising out of the concerned contract. On the hand multi-tiered dispute resolution clause means a clause in a contract that provides for distinct stages such as negotiation, mediation or arbitration. However, Korean courts are not in the same position on the validity of selective arbitration agreementin multi-tiered dispute resolution clause. Some courts in first instance recognized its validity on the ground that parties still intend to arbitrate in the contract despite the poor drafted arbitration clause. Other courts reject its validity on the ground that parties did not intend to resort to arbitration only with giving up their right to sue at courts to resolve their disputes by choosing selective arbitration agreement. Several cases are recently on pending at the Supreme Courts, which decision is expected to yield the court's position in uniform way. Having reviewed recent Korean courts' decisions on validity and applicability of arbitration agreement, this article suggests that courts are generally in favor of arbitration system It is also found that some courts' decisions narrowly interpreted the concerned stipulations in arbitration law despite they are in favorable position to the arbitration itself. However, most courts in major countries broadly interpret arbitration clause in favor of validity of selective arbitration agreement even if the arbitration clause is poorly drafted but parties are presume to intend to arbitrate. In conclusion it is desirable that selective arbitration agreement should be interpreted favorable to the validity of arbitration agreement. It is time for Korean courts to resolve this issue in the spirit of UNCITRAL model arbitration law which the new Korean arbitration law is based on.

• 무역상무연구
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• 제38권
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• pp.155-180
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• 2008

The purpose of this paper is to examine the major elements of Arbitration Clause in international investment contracts and to help the investor, especially foreign investors, considering these elements when they draft the contracts. First of all, to describe the extent of the arbitrable issues broadly is very important by using the phrase such as "disputes in connection with". Furthermore in order to be enforceable, the issues must be a subject-matter to be submitted to arbitration in accordance with the laws of the place of arbitration and the law application to the merits of the disputes (N.Y. Convention, Art. II). Second, the appointment of the arbitrators usually shall be based on the principle of freedom of contract. If the parties do not agree on the appointment, it is decided in accordance with the arbitration rules of the institution by the tribunal. Third, the procedural rules of the arbitration are the arbitration rules of the arbitration institution in case of institution arbitration, unless otherwise agreed. Forth, what is the most importance element of Arbitration Clause is the place of arbitration. In this case, also the principle of freedom of contract has priority. Unless otherwise agreed, Washington is the place of arbitration in case of ICSID Arbitration, but in case of ICC Arbitration, neutral third country may be the place of arbitration. However in case of ad hoc arbitration, both parties should indicate the place. If not, the whole arbitration may be paralysed by an uncooperative party. Besides the major elements, I examined the relation between the arbitration clause and award enforcement in terms of sovereign immunity. The enforcement of awards in the field of state contracts many encounter the problem of the sovereign immunity, which means that the State itself or the State enterprise is the contract partner. To avoid the this problems, it is advisable for the parties insert the clause such as ICSID Model Clause XIX.

• 무역상무연구
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• 제25권
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• pp.165-187
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• 2005

Arbitration is a creature of contract. The parties agree that selective dispute resolution clause provides them with a choice to litigate or arbitrate certain disputes. Under the agreements, the parties had the option in the action. In the event any dispute arises between the parties concerning our representation or payment of our fees and disbursements which cannot be promptly resolved to our mutual satisfaction, you agree that dispute will be submitted to arbitration. Arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit. The selective arbitration agreement has become an accepted method of dispute resolution. However, the trend of dispute settlement has changed. The selective arbitrations clauses are to be construed as broadly as possible, and arbitration will be compelled unless it may be said with positive assurance that arbitration clause is not susceptible of an interpretation that covers the asserted dispute.

• 한국무역상무학회:학술대회논문집
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• 한국무역상무학회 2004년도 제32회 산학협동 세미나
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• pp.149-170
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• 2004

Arbitration is a creature of contract. The parties agree that selective dispute resolution clause provides them with a choice to litigate or arbitrate certain disputes. Under the agreements, the parties had the option in the action. In the event any dispute arises between the parties concerning our representation or payment of our fees and disbursements which cannot be promptly resolved to our mutual satisfaction, you agree that dispute will be submitted to arbitration. Arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit. The selective arbitrations clauses are to be construed as broadly as possible, and arbitration will be compelled unless it may be said with positive assurance that arbitration clause is not susceptible of an interpretation that covers the asserted dispute.

• 한국중재학회지:중재연구
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• 제24권2호
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• pp.109-136
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• 2014

The separability of an arbitration clause is generally recognized throughout the world, but there are no provisions of it under the Federal Arbitration Act(FAA) of the United States. As such, the controversy over the recognition of separability has developed with the rise of certain cases. The Supreme Court recognized this separability based on section 4 of the FAA in the decision of the Prima Paint case. The Court ruled that courts must decide the claim about the fraudulent inducement of an arbitration agreement itself, but they must not decide the claim about the fraudulent inducement of a contract involving a broad arbitration clause, and they have to proceed with the arbitration. The Court said that the subject of an arbitral award is set by the agreement of the parties, and thereby arbitrators can decide the issues about the fraudulent inducement of a contract on the basis of the arbitration clause when it is broad to the point of including the issues. Many courts have extended the separability beyond the fraud context to include other defenses to contract formation in the federal courts such as the occurrence of mistake, illegality, and frustration of purpose. In interpreting the parties' intention of ensuring arbitrator competence, the Supreme Court has treated differently the issues about whether the arbitration agreement exists or not and the issues about whether the preconditions for dispute resolution by a valid arbitration agreement is fulfilled or not. The Court holds that the federal policy in favor of arbitration does not apply to the former issues, and arbitrators can decide theses issues only when parties assign them clearly and unmistakably to them. However, the later issues receive a presumption in favor of arbitration; i.e., when the interpretation of a valid arbitration clause is contested, the arbitrators can decide these issues. In the First Options case, the former issue was questioned. The question of the separability of an arbitration clause is where the validity of the main contract involving the arbitration clause is contested. Therefore, the doctrine of separability did not operate in the First Options case in which the validity of the arbitration clause itself was questioned, and the decision in the First Options was irrelevant to the separability. I think that the Prima Paint case and the First Options case have different issues, and there is no tension between them.

• 한국중재학회지:중재연구
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• 제27권1호
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• pp.3-35
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• 2017

For recent years, several disputes between Korean consumers and multinational companies have arisen. Since the disputes were big and material that children's safety was at issue, a question started if Korean law properly has protected consumers' rights against multinational companies. While the Korean legal society tried to legislate punitive compensation with this concern, the U.S. Supreme Court reached an interesting case law regarding consumer contracts. A recent trend on consumer contracts in the United States shows that general terms have arbitration clause with class action waiver. As much as international arbitration has worked as the most effective resolution in international commercial disputes, the concept is still foreign and the experts are not approachable to lay individual consumers. However, class action in arbitration can hugely help for lay individual consumers to bring a case before arbitration tribunal. California courts consistently showed the analysis that the practical impact of prohibiting class action in arbitration clause is to ban lay individual consumers from fighting for their rights. However, the Supreme Court held that the arbitration clause shall be enforced as parties agree even if consumers practically cannot fight for their rights in the end. Even though consumer contracts are a typical example of lack of parity and of adhesive contract, the Supreme Court still applies liberalism that parties are equal in power and free to agree. This case law has a crucial implication since Korean consumers buy goods and services from the U.S. and other countries in everyday life. Accordingly, they are deemed to agree on the dispute resolution clauses, which might violate their constitutional right to bring their cases before the adjudication tribunal. This issue could be more important than adopting punitive compensation because consumers' rights are not necessarily governed by Korean law but by the governing law of the general terms and conditions chosen and written by the multinational companies. Thus this paper studies and analyzes the practical reality of international arbitration and influence of arbitration clause with class action waiver with the U.S. Supreme Court and California case laws.

• 한국중재학회지:중재연구
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• 제26권4호
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• pp.43-62
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• 2016

The international arbitration system has been a useful method of settling disputes arising from international transactions. Arbitration provides the opportunity for the parties to choose a fair and neutral forum and to participate in the selection of the decision maker and the rules that will be applied. Because arbitration is a creature of contract, there is no agreement to arbitrate if there is no contract. An arbitration clause should be designed to fit the circumstances of the transaction and the parties' needs. The parties draft an arbitration clause with insufficient attention to the transaction to which it relates. Insufficient attention to arbitration agreement has caused the delay of arbitration procedure or even the inability to arbitrate. Therefore the parties pay sufficient attention to the underlying transaction so that the arbitration clause can be tailored to their particular requirements and to possible disputes that may reasonably be anticipated.

• 한국중재학회지:중재연구
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• 제23권3호
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• pp.61-80
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• 2013

The U.S. Supreme Court delivered a decision on the case between AT&T and Concepcion, which confirmed the contractuality of a defense as a threshold to distinguish between what is a viable defense for invalidation of consumer arbitration agreement and what is not. In this paper, the adhesiveness of arbitration clause, which is a unique character for consumer arbitration, is investigated in the U.S. as a legal defense to invalidate the consumer arbitration agreements, and its contractuality and related legal doctrines are analyzed. The legal issues of consumer arbitration have been analysed in several legal perspectives including the voluntary, knowing and intelligent doctrine, doctrine of separation, contract of adhesion and the contractuality of defenses. Among all of these, the first three issues are related with arbitration clause, and the last one, the contractuality of defenses, reflects the nature of defenses invalidating the consumer arbitration agreement.