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However, it has been criticized as being inconsistent with commercial practice in as much as it enables a party to perform a contract, as set out in an order form or similar document, and nevertheless claim that an arbitration clause contained in the document is ineffective because that the party did not sign it, or “exchange” any written message confirming it. This problem has come up on a number of occasions in Hong Kong. Judge Neil Kaplan, who as High Court Judge in charge of the Constitution and Arbitration List decided most of the cases that arose under the first years of the Model Law in Hong Kong, believes that the drafters of both the Model Law and the New York Convention erred in failing to accommodate situations where contacts containing arbitration clauses have been accepted by conduct:
‘…I find difficultly in seeing… Why if one party is sent a contract which includes an arbitration clause and that party acts on that contract and thus adopts it without qualification, that party should be allowed to wash his hands of the arbitration clause but at the same time maintain an action for the price of the goods delivered or conversely sue for breach.’
In response, Article 7 was modified by the Hong Kong 1996 Arbitration Ordinance, which eliminated the requirement of writing, so that evidence by other means is acceptable to show an intent to arbitrate. The New Zealand Arbitration Act, provides “ an arbitration agreement may be made orally or in writing”. Similarly in England, “English law prescribes no formal requirements for a valid arbitration agreement. It need not even be in writing. An oral arbitration agreement, if followed by completed arbitration proceedings, can be the foundations of an followed by completed arbitration proceedings, can be the foundations of an enforceable award, although the agreement will not be an arbitration agreement for the purposes the Arbitration acts and the proceedings will not be subject to the important process of the Court to provide support and supervision which those Acts confer,” In order to meet the future development of international trade, the commandment “in writing” was challenged by the Working Group Ⅱ (Arbitration) set up under UNCITRAL, which is going to modify Article 7 of Model Law. “The purpose of the revision of article 7 of Model Law can be sum up as a word, that is, to recognize a various forms of written arbitration agreements as well as recognizing that an arbitration agreement in an oral form is effective”.
Apparently, this revision is a grave change. Nevertheless, a problem could emerge, which is difficult to define the meanings of arbitration agreement. For example, how to deal with the problems of any modification of the original agreement, how to decide the scope of the agreement?
3. Capacity of the Parties
Both a natural and a juristic person can be parties in arbitration. To meet the criteria of subjective qualification, the parties only have to be fully legally capable. But the Model Law doesn’t give us criteria. It deals with this issue only by article 36[2,a(1)], lack of capacity is a ground for objection to an arbitration agreement or to an arbitration award. In the case, Success International Inc. v. Environmental Export International of Canada Inc. , their agreement was granted void, because one party clearly lacked capacity.
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