Article 30

The Convention shall remain in force for five years from the date of its entry into force in accordance with the first paragraph of Article 29 even for States which subsequently have ratified, accepted, approved it or acceded to it.

If there has been no denunciation, it shall be renewed tacitly every five years. Any denunciation shall be notified to the Ministry of Foreign Affairs of the Netherlands, at least six months before the expiry of the five year period. It may be limited to certain of the territories or territorial units to which the Convention applies.

The denunciation shall have effect only as regards the State which has notified it. The Convention shall remain in force for the other Contracting States.

Article 31

The Ministry of Foreign Affairs of the Netherlands shall notify the States Members of the Conference, and the States which have acceded in accordance with Article 25, of the following

1 the signatures and ratifications, acceptances and approvals referred to in Article 24;

2 the accessions referred to in Article 25;

3 the date on which the Convention enters into force in accordance with Article 29;

4 the extensions referred to in Article 26;

5 the declarations referred to in Article 27;

6 the reservations referred to in Articles 6, 15 and 16, and the withdrawals referred to in Article 28;

7 the information communicated under Article 23;

8 the denunciations referred to in Article 30.

In witness whereof the undersigned, being duly authorised thereto, have signed this Convention.

day of

19

Done at The Hague, on the in the English and French languages, both texts being equally authentic, in a single copy which shall be deposited in the archives of the Government of the Netherlands, and of which a certified copy shall be sent, through the diplomatic channel, to each of the States Members of the Hague Conference on Private International Law at the date of its Thirteenth Session.

Final Act of the Thirteenth Session of the Hague Conference, pp. 9-13. The Session also formulated a draft Convention on the Law Applicable to Matrimonial Property Regimes, and it instituted a Special Commission to prepare a text of a draft convention on agency, based on the deliberations of the Thirteenth Session.

§3

International Commercial Arbitration

Arbitration Clauses

In Sam Reisfeld & Son Import Co. v. S. A. Eteco, 530 F.2d 679 (1976), the U.S. Court of Appeals for the Fifth Circuit held, on April 26, 1976, that enforceability of the arbitration clause in an agency contract was governed exclusively by the Federal Arbitration Act of 1925 (9 U.S.C. 1-14), rather than by principles relating to forumselection clauses in international agreements.

The New Orleans firm of Reisfeld & Son, which acted as exclusive sales representative for S. A. Eteco, a subsidiary of a Belgian wire products manufacturer, entered into a contract with Eteco containing an arbitration clause requiring all disputes to be settled by arbitration in Coutrai, Belgium. When Eteco notified Reisfeld it was terminating the contract and distributing its products directly,

Reisfeld sued for breach of contract and asserted a tort claim for misuse of confidential customer information and alleged antitrust violations. When defendants moved to dismiss for lack of jurisdiction, the District Court for the Eastern District of Louisiana treated the motion as one seeking a stay pending arbitration and stayed all but the antitrust claims.

In the Court of Appeals, Reisfeld urged that the forum chosen for arbitration was so unreasonable that it either vitiated the arbitration clause altogether or required transfer to a more neutral situs. The Court affirmed the District Court's ruling. It held that Reisfeld's attack faltered on its initial premise that the unreasonableness test used in M/S Bremen v. Zapata Offshore Co., 407 U.S. 1 (1972), is applicable to arbitration clauses. It added:

[W]e agree with the District Court that the enforceability of the arbitration clause at issue is governed exclusively by the explicit provisions of the Federal Arbitration Act . . . . Under the Act, a party seeking to avoid arbitration must allege and prove that the arbitration clause itself was a product of fraud, coercion, or "such grounds as exist at law or in equity for the revocation of any contract."... This stringent standard has not been modified by the Supreme Court's recent decision in Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974). The Court in Scherk upheld a stay pending arbitration even though the plaintiffs asserted a claim under the Federal securities law. The references to Bremen in that case were made to emphasize the Court's rejection of a provincial approach in favor of the policy of giving effect to the agreement of the parties in international transactions, not to incorporate the Bremen standards wholesale to situs selections in arbitration clauses. If anything, Scherk strengthens defendants' position by insisting upon liberal enforcement of arbitration clauses in multinational contexts. Since Bremen is inapplicable, the District Court did not need to reach the question of whether the selection of Coutrai was unreasonable under the circumstances here presented.

The Appeals Court ruled that the antitrust claims should proceed to trial since such claims are generally not arbitrable.

In Hanes Corp. v. Millard, 531 F.2d 585 (1976), the assignee of a U.S. patent brought suit for (1) declaratory judgment as to the scope and validity of the patent, and (2) a determination that the royalty claims of the assignors who were French citizens were barred by the statute of limitations. The assignment contract contained a clause on arbitration of all disputes arising from its interpretation or “issuing from it." The U.S. District Court for the District of Columbia declared that any claim arising from the assignment contract was barred by the statute of limitations, and the assignors appealed.

The Court of Appeals, on January 30, 1976, vacated the declaratory judgment and remanded the case. It noted that the district judge would not have acted improperly had he entertained and proceeded to resolution of the matter of the scope and validity of the patent even though the patent had expired. But, said the Court, he should not have exercised jurisdiction to render a declaratory judgment that any claim arising from the assignment contract was barred by the statute of limitations where the parties contemplated that any contractual disputes would be resolved by an arbitration board. The opinion stated, in part:

With respect to Count I of Hanes' complaint, . . . there is a strong interest in having questions of patent scope and validity adjudicated in the Federal courts . . . . [T]he alternative to an anticipatory Federal adjudication in this case is to leave the issues of patent scope and validity to confront the arbitration panel. Such issues involve complex and difficult questions in applying an extremely technical body of law. They are questions that may be unfamiliar to arbitrators, particularly if members of the panel are not lawyers or are citizens of a foreign country. In addition, the expertise of arbitrators has always lain in resolving, perhaps by way of compromise, contractual disputes rather than in interpreting the import of complicated Federal legislation. . . . And if, partly for these reasons, an arbitration panel were to determine that the issues of patent law were not arbitrable, [I]t is possible that the next tribunal to face these issues-most likely one called upon to review or enforce an arbitration award-would be a court in a foreign country, again not a desirable forum for determining the scope and validity of [a] United States Patent.... We conclude, therefore, that the district judge would not have acted improperly had he entertained and proceeded to resolution of the declaratory relief that was originally sought. With respect to Count II, however the request for a declaration that any contractual claim would be barred by the statute of limitations-the balance of factors is quite different. . . . [T]here is present in this case no important policy to counteract the inappropriateness of considering declaratory relief as to an expired patent. In fact, there is at least one important additional reason why it would be improper to exercise discretion over this claim.

In our view the parties contemplated that contractual disputes growing out of the assignment contract would be resolved not by the U.S. District Court in the District of Columbia-or indeed by any court-but rather by an arbitration board pursuant to the rules and regulations of the International Chamber of Commerce. The propriety of declaratory relief must be judged with reference to whether the issue in question is more properly resolved in another forum. . . . Here the parties before us negotiated a broad arbitration agreement The Federal courts have recognized a strong Federal policy in favor of voluntary commercial arbitra

tion, as embodied in the United States Arbitration Act, 9 U.S.C. 1 et seq. (1970).... That Act, "reversing centuries of judicial hostility to arbitration agreements, was designed to allow parties to avoid 'the costliness and delays of litigation,' and to place arbitration agreements upon the same footing as other contracts. . . ."" Scherk v. Alberto-Culver Co., 417 U.S. 506, 510-11 (1974), quoting H.R. Rep. No. 96, 68th Cong., 1st Sess., at 1, 2 (1924). In addition to speed and economy, the advantages that may commend arbitration to parties are manifold: informality, the possibility of coordination with other modes of conciliation, and the ability to preselect the location of, a set of procedural rules or substantive law governing. or even the language to be used in, dispute resolution. . . . Even where, as here, such preselection has not explicitly been made, the parties may wish to leave to the arbitrators, rather than to a court of a particular jurisdiction, the authority to make such choices. .

[S]everal of these advantages may be especially important when the dispute committed to arbitration is international in character. The uncertainties arising from possible adjudication in forums that may be far away, conducted in a foreign language, with unknown or alien procedures and substantive rules, plainly are more substantial in such a situation. Within only the last two years. the Supreme Court recognized the particular importance of agreements to arbitrate in international commercial transactions. In Scherk v. Alberto-Culver Co., supra, the Court indicated that the international character of an arbitration agreement constituted a special reason for judicial deference to the arbitral process, 417 U.S. at 515-16, . . . emphasizing that reliance upon that process aided in limiting the uncertainties inherently attendant upon international trade and commerce, id. at 516-19. . . . These considerations indicate to us that the District Court's assumption of declaratory judgment jurisdiction. . . so as to displace international arbitration proceedings was improper.

The argument in favor of deference to the arbitral process fails. of course, if there is no issue which falls within the scope of the arbitrator's authority. Hence, . . . we must inquire both (1) whether the parties' agreement contemplated commitment to arbitration of questions relating to the statute of limitations, and (2) if so, whether such an intent is appropriately given legal force. As to the first inquiry, we begin with the accepted premise that, in construing arbitration agreements, every doubt is to be resolved in favor of arbitration . . . . That canon of construction implements several important policies: it eases court congestion: it provides broad latitude to permit effectuation of the intent of the parties; and it limits the delay in dispute resolution that would occur were a wide range of issues to require judicial consideration prior to commencement of arbitration-delay that would undermine a principal objective of arbitration itself.

Although the second issue may be somewhat less free from doubt, we believe that there is no persuasive reason for not giving legal force to the parties' intent to encompass the statute of limitations issue within the arbitration clause. Again, we start from an accepted premise-that after determining the existence of a valid and enforceable agreement that extends to the dispute at hand, courts should not play a broad role in denying effect to agreements to arbitrate. . . . This premise, too, is a product of the strong Federal policy favoring arbitration.

We conclude . . . that the strong policy in favor of arbitration, especially in international commerce, and the precedents both directly on point and relevant by analogy, suggest the appropriateness of giving legal force to the parties' arbitration agreement as it encompasses the statute of limitations question. That being so, assumption of declaratory judgment jurisdiction over Count II of the complaint was inappropriate.

The U.S. District Court for the Southern District of New York, on May 13, 1976, held in Reefer Express Lines Pty., Ltd. v. Petmovar, S.A., 420 F. Supp. 16 (1976), that a vessel owner, by demanding arbitration in a dispute with a charterer, had not waived its right to pursue certain judicial remedies. Plaintiff, as owner of the vessel, had by letter dated December 31, 1975, demanded arbitration pursuant to a clause of the charter party contract with the defendant charterer. A hearing was held before arbitrators on March 10, 1976, and no decision had been rendered when plaintiff brought action in the District Court on March 12, 1976. Defendant moved to dismiss on the ground that plaintiff had chosen the forum of arbitration to resolve the dispute.

Section 8 of the Arbitration Act (9 U.S.C. 8) provides:

If the basis of jurisdiction be a cause of action otherwise justiciable in admiralty, then, notwithstanding anything herein to the contrary, the party claiming to be aggrieved may begin his proceeding hereunder by libel and seizure of the vessel or other property of the other party according to the usual course of admiralty proceedings, and the court shall then have jurisdiction to direct the parties to proceed with the arbitration and shall retain jurisdiction to enter its decree upon the award.

The Court, therefore, held that an agreement to arbitrate does not oust the Federal court of jurisdiction and, despite the agreement of the parties to arbitrate, the traditional admiralty procedure should be available to the aggrieved party. It said that the arbitration is made a phase of the suit in admiralty, and it appears immaterial whether arbitration has been initiated prior to the time of the commencement of the court action.