Opinion ID: 765489
Heading Depth: 2
Heading Rank: 2

Heading: Construction of the New York Convention

Text: 21 As noted above, article II, section 1 of the Convention provides that each contracting state (including the United States, China, the United Kingdom, and Hong Kong) shall recognize an agreement in writing to arbitrate a given dispute. Article II, section 2, in turn, defines the term agreement in writing to include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams. Lark contends that the modifying clause signed by the parties or contained in an exchange of letters or telegrams, modifies both: (1) an arbitral clause in a contract and (2) an arbitration agreement and, as a result, the dispute between the parties is not arbitrable due to the absence of Lark's signature on the Purchase Orders. Kahn Lucas contends, and the district court held, that signed by the parties modifies only the clause immediately preceding it, an arbitration agreement, and not the previous clause. Thus, in Kahn Lucas's view, the unsigned Purchase Orders constitute an agreement in writing to arbitrate enforceable under the Convention. 22 As an initial matter, we must determine the meaning of the two elements in the series, namely an arbitral clause in a contract and an arbitration agreement. We find the meaning of an arbitral clause in a contract to be self-evident. We also find that the phrase an arbitration agreement, because it is used in conjunction with the phrase an arbitral clause in a contract, refers to any agreement to arbitrate which is not a clause in a larger agreement, whether that agreement is part of a larger contractual relationship or is an entirely distinct agreement which relates to a non-contractual dispute. The parties agree that the Arbitration Clauses each constitute an arbitral clause in a contract and not an arbitration agreement under the Convention. 23 We turn, then, to the plain meaning of the English-language version of the Convention. Taking its lead from the Fifth Circuit's analysis in Sphere Drake, 16 F.3d at 669-70, Kahn Lucas argues that the grammatical structure of section 2 compels the conclusion that its dispute with Lark falls within the Convention. We disagree. Section 2 takes the structure A or B, with C. This structure is exactly that to which the supplementary rule of punctuation expressed in Bingham applies. Grammatically, the comma immediately following an arbitration agreement serves to separate the series (an arbitral clause in a contract or an arbitration agreement) from the modifying phrase (signed by the parties or contained in an exchange of letters or telegrams), and suggests that the modifying phrase is meant to apply to both elements in the series. Indeed, this comma can serve no other grammatical purpose. As a result, Kahn Lucas's reading of the statute would render the comma mere surplusage, a construction frowned upon. Cf.Trichilo v. Secretary of Health & Human Servs., 823 F.2d 702, 706 (2d Cir. 1987) (we will not interpret a statute so that some of its terms are rendered a nullity). 24 Although the grammatical structure of the English-language version of the Convention suggests that the parties' dispute is not arbitrable, we are hesitant to use punctuation as the sole guide to the meaning of the text. See United States Nat'l Bank, 508 U.S. at 454-55. But in this case, other available interpretive tools strongly support the conclusion the punctuation suggests. 25 First, the plain language of the other working-language versions of the Convention compels the conclusion that, in order to be enforceable under the Convention, both an arbitral clause in a contract and an arbitration agreement must be signed by the parties or contained in an exchange of letters or telegrams. In the French- and Spanish-language versions, the word for signed appears in the plural form, signes and firmados respectively. New York Convention, 21 U.S.T. 2524, 2538. Because each of the two antecedents is couched in the singular, the modifier unambiguously applies to both of them. If, as Kahn Lucas argues, only an arbitration agreement need be signed by the parties, the French-language version would utilize the verb signe and the Spanish firmado. 26 The non-working official-language versions of the Convention do not offer similarly clear-cut support for this interpretation, but do not weigh strongly against it either. The Chinese-language version, like the English-language version, cannot utilize a uniquely plural form of the verb for signed. Nor does it contain punctuation helpful to our task. However, in the Chinese-language version, the modifier signed precedes, rather than follows, the objects it modifies. New York Convention, 21 U.S.T. 2529. Therefore, if the modifier were construed to apply only to one of the objects, it would apply to arbitral clause in a contract, rather than arbitration agreement, offering no comfort to Kahn Lucas in this case. The Russian-language version uses the singular form of the verb signed (transliterated as PODPECANOYE), suggesting that it modifies only arbitration agreement. New York Convention, 21 U.S.T. 2533. But because the plain meaning of the French- and Spanish-language versions of the Convention unambiguously supports the conclusion that the modifier applies to both antecedents, the structure of the English-language version suggests such an interpretation, and the Chinese-language version is susceptible of such an interpretation, we are reluctant to allow the seemingly contradictory Russian-language version to dictate a different result. See Eastern Airlines, 499 U.S. at 536 (giving controlling weight to meaning of language in which treaty was drafted). This is particularly so in light of the stated purposes of the Convention, one of which is to unify the standards by which agreements to arbitrate are observed and arbitral awards are enforced in the signatory countries. Scherk, 417 U.S. at 520 n.15 (citing the Convention). 27 Finally, to the extent the plain meanings of the non-English language versions of the Convention do not resolve any ambiguity that exists in the English-language version, the legislative history of article II puts the matter to rest. The text of article II, as reported by the Conference's Working Group, and subject only to modification by the Drafting Committee for form, not substance, Summary of the 23d Meeting, U.N. Conference on Int'l Commercial Arbitration, U.N. ESCOR, E/Conf.26/SR.23 at 4, 7 (Sept. 12, 1958), reverses the terms arbitration agreement and arbitration clause in a contract. The Working Group text thus reads: The expression 'agreement in writing' shall mean an arbitration agreement or an arbitration clause in a contract signed by the parties, or an exchange of letters or telegrams between those parties. 2 Consideration of the Draft New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, U.N. Conference on Int'l Commercial Arbitration, U.N. ESCOR, E/Conf.26/L.59, Agenda Item 4, ¶ 2 (June 6, 1958). Therefore, unless the modifier signed in the Convention applies to both antecedents, the Drafting Committee's editorial changes would amount to an unintended, and unauthorized, substantive amendment to article II, section 2. 28 Accordingly, although we are cognizant that the Convention should be interpreted broadly to effectuate its recognition and enforcement purposes, Bergesen v. Joseph Muller Corp., 710 F.2d 928, 933 (2d Cir. 1983), the rules governing our construction do not allow us to follow the Fifth Circuit's interpretation of article II, section 2 as expressed in Sphere Drake. Upon review of the Convention's text, punctuation and subject matter, as well as an examination of the Convention's legislative history, we hold that the modifying phrase signed by the parties or contained in an exchange of letters or telegrams applies to both an arbitral clause in a contract and an arbitration agreement.