Axa Re v Ace Global Markets Ltd.

Whether an arbitration clause is incorporated by reference is a question of construction assessed against the contract as a whole and its commercial context. A reference to English law and jurisdiction is not necessarily inconsistent with an arbitration clause. The court should seek to reconcile the provisions and give effect to each. Only where there is a clear and irreconcilable conflict will a specifically agreed jurisdiction clause prevail over an arbitration clause incorporated from standard terms. A reference to English jurisdiction may operate alongside arbitration by identifying the supervisory court and the court for post-arbitration proceedings.

Axa Re sought a declaration under section 72(1)(a) of the Arbitration Act 1996 and an injunction restraining arbitration proceedings commenced by Ace Global Markets. The dispute concerned a reinsurance slip incorporating the EXEL 1.1.90 wording by reference. The slip also stated that the contract was subject to English law and jurisdiction, while EXEL clause 15 contained an arbitration agreement. The central issue was whether the express jurisdiction wording deleted or was inconsistent with the incorporated arbitration clause.

1. Application dismissed. The arbitration agreement was incorporated into the reinsurance contract and remained effective.
2. Incorporation of an arbitration clause is determined by construing the language of the contract in its commercial context. Under section 6(2) of the Arbitration Act 1996, a reference to a document containing an arbitration clause constitutes an arbitration agreement where the reference makes that clause part of the agreement.
3. The contract must be read as a whole. The court should endeavour to give effect to every provision. An incorporated clause is displaced by a specifically agreed term only if the provisions are clearly and irreconcilably inconsistent.
4. The express English law and jurisdiction provision could sensibly operate with EXEL clause 15. The reference to jurisdiction was capable of identifying the supervisory court for the arbitration and the appropriate court for proceedings after arbitration. The provisions therefore operated in parallel and did not create impermissible surplusage.
5. The jurisdiction wording could not be characterised as a deletion or replacement of the arbitration clause. Nor was it necessarily an exclusive jurisdiction agreement when read alone or with the arbitration provision.
6. The approach was consistent with Paul Smith v H&S International Holding Inc [1991] 2 Lloyd's Law Rep 127 and Shell International Petroleum Co Ltd v Coral Oil Co Ltd [1999] 1 Lloyd's Law Rep 72. Indian Oil Corp v Van Oil Inc [1991] 2 Lloyd's Rep 634 was distinguishable because its clauses were mutually inconsistent.
7. The application for declaratory and injunctive relief was refused, and the application was dismissed.