Dubai Court of Cassation Judgment: Incorporation of Arbitral Clause by Reference in Bill of Lading

Analysis

Most arbitral clauses are contained within the main body of a contract. However sometimes parties find it convenient to agree the specifics of an agreement in one document, and then refer to another document for the standard terms.

The terms in this other document are then incorporated by reference and become part of the contract. One of these standard terms may be an arbitration clause.

Such practices can create problems under UAE law because arbitration is considered a special form of dispute resolution which takes away the jurisdiction of the national courts. As such, parties must be shown to have consciously agreed to arbitration (usually evidenced by their signature on the contract), and this may not be the case if the clause is found embedded in a separate list of standard terms referred to in the main body of the contract.