## Facts

- A Ukrainian clothing manufacturer and a German textiles manufacturer contracted for the clothing manufacturer to produce garments using textiles supplied by the German company.
- The written contract contained (i) an arbitration clause and (ii) a clause requiring all contractual changes to be in writing and signed by both parties.
- The contract was to expire on Dec. 31, 2004, but the parties continued performance thereafter.
- A written extension through Dec. 2007 was executed; the German company’s signatures were attributed to an individual identified as “Mr. P.”
- A dispute arose in 2007 over nonpayment of an invoice, and the Ukrainian company commenced arbitration.
- The German company contested arbitral jurisdiction, asserting Mr. P lacked authority to bind it and alleging the signatures on contractual addenda (including the extension) were forged.
- The Ukrainian company argued the German company ratified the contract framework, including arbitration, by continuing to perform (including supplying materials); it offered no other publicly described evidence validating the addenda.
- A sole arbitrator rejected the jurisdictional objection and issued an award for the Ukrainian company.
- The Ukrainian company sought recognition and enforcement of the award in Germany; the matter was decided by a German Court of Appeal.

## Issues

1. Whether the German company was bound by the arbitration agreement where the purported signatory’s authority was disputed and signatures on addenda were alleged to be forged.
2. Whether continued performance could constitute ratification (or similar conduct-based consent) sufficient to bind a party to an arbitration agreement, particularly in light of a written-modifications clause.
3. What level of scrutiny the enforcing court applies to jurisdictional objections at the recognition/enforcement stage, including disputes over the existence or validity of the arbitration agreement.
4. How burdens of proof operate in enforcement proceedings when the resisting party invokes invalid consent grounds.

## Decision

- The Court of Appeal issued an appellate decision in enforcement-related proceedings concerning the award and the respondent’s objections to arbitral jurisdiction.
- The publicly available materials do not disclose the court’s ultimate disposition (enforcement granted or refused) or the court’s articulated reasoning.

## Legal Principles

- Recognition and enforcement may be resisted where the arbitration agreement is not valid under the applicable law, including where consent is challenged on authority or forgery grounds.
- A court at the enforcement stage may examine the existence and validity of an arbitration agreement notwithstanding the tribunal’s prior jurisdictional ruling.
- A party may attempt to establish consent to arbitration through ratification by conduct, but such consent may require clear proof, especially when formal written requirements and authenticity of signatures are disputed.
- In enforcement proceedings, the resisting party commonly bears the burden to prove a refusal ground; however, serious challenges to the existence of the arbitration agreement can require persuasive affirmative proof of valid consent.

## Conclusion

The case concerned enforcement of an arbitral award in Germany where the respondent denied having validly consented to arbitration due to alleged lack of signatory authority and forgery, and it raised recurring enforcement questions about proof of consent, potential ratification by continued performance, and judicial review of jurisdiction at the enforcement stage.


Clothing Manufacturer (Ukraine) v. Textiles Manufacturer (Ger.), 35 Y.B. Com. Arb. 362 (Ger. Ct. App. 2010)