## Facts

- A Liechtenstein grain trader (Beromun) and an Italian partnership (SIAT) negotiated in October 1974 over a multi-thousand-ton corn sale.
- The negotiations occurred through telephone conversations and telexes addressing price, shipment, and other terms.
- Beromun claimed an oral agreement was reached and then confirmed in writing, with the parties intending to use NAEGA Form No. 2, which contains an arbitration clause and a consent-to-jurisdiction provision.
- SIAT denied contract formation, asserting no meeting of the minds and disputing a material shipment term, including the meaning of “one vessel.”
- Beromun petitioned in federal court to compel SIAT to arbitrate before the American Arbitration Association in New York under the Federal Arbitration Act as implemented by the New York Convention.
- SIAT cross-moved to dismiss, including for lack of subject-matter and personal jurisdiction; the court treated the existence of an enforceable written arbitration agreement as dispositive.

## Issues

1. Whether the parties’ negotiations and telexes, including references to NAEGA Form No. 2, constituted an “agreement in writing” to arbitrate under Article II of the New York Convention.
2. Whether later letters and telexes, even absent a completed sales contract, amounted to an arbitration agreement “contained in an exchange of letters or telegrams” under Article II(2).
3. If no enforceable arbitration agreement existed, whether the court lacked subject-matter jurisdiction under the Convention/FAA and personal jurisdiction over SIAT.

## Decision

- The court held that no enforceable written agreement to arbitrate existed within the meaning of Article II of the New York Convention.
- The court rejected Beromun’s argument that references to NAEGA Form No. 2 established mutual assent to arbitrate, finding the communications reflected ongoing, incomplete negotiations and lack of agreement on material terms.
- The court also rejected the alternative theory that later correspondence independently formed an arbitration agreement, finding no clear written manifestation of mutual assent to arbitrate.
- Because the asserted jurisdiction depended on a valid Convention arbitration agreement (and Beromun’s personal-jurisdiction theory depended on the alleged consent clause), the petition was dismissed for lack of subject-matter and personal jurisdiction.

## Legal Principles

- Under the New York Convention, a court may compel arbitration only upon a qualifying “agreement in writing,” meaning an arbitral clause in a contract or an arbitration agreement signed by the parties or contained in an exchange of letters or telegrams.
- References in negotiations to a standard form containing an arbitration clause do not establish an enforceable arbitration agreement absent clear mutual assent to arbitrate.
- When federal jurisdiction to compel arbitration is invoked under the Convention and its implementing FAA provisions, the existence of an enforceable Convention-compliant arbitration agreement is a threshold requirement; without it, dismissal for lack of subject-matter jurisdiction is required.
- A claimed consent-to-jurisdiction provision embedded in an arbitration clause cannot supply personal jurisdiction if no enforceable arbitration agreement is shown.

## Conclusion

The court dismissed a petition to compel international arbitration because the parties’ telexes and related communications did not demonstrate a Convention-qualifying written agreement to arbitrate, eliminating both subject-matter jurisdiction under the Convention/FAA and any consent-based personal jurisdiction over the foreign respondent.


Beromun Aktiengesellschaft v. Societa Industriale Agricola “Tresse” (SIAT), 471 F. Supp. 1163 (S.D.N.Y. 1979)