## Facts

- Kahn Lucas Lancaster, Inc., a New York children’s clothing reseller, used Lark International Ltd., a Hong Kong purchasing agent, to arrange overseas manufacture and importation of garments.
- Their course of dealing involved Kahn Lucas issuing purchase orders; manufacturers invoicing Kahn Lucas for goods; Lark invoicing Kahn Lucas for its commission; and Kahn Lucas paying through a letter of credit benefiting Lark, which then paid the manufacturer.
- In 1995, Kahn Lucas issued two purchase orders for children’s fleece garments to be manufactured in the Philippines for resale to Sears.
- The purchase orders listed Lark as “Lark International (Agent)” and were signed only by Kahn Lucas.
- On the reverse side of the purchase orders, standard conditions included an arbitration clause requiring arbitration of all disputes in New York City under New York law.
- Lark did not sign the purchase orders but performed its usual functions (coordinating with manufacturers, inspecting goods, and arranging shipment).
- Kahn Lucas alleged some goods were nonconforming and many were late or not delivered, and it sought to compel arbitration under the clause printed on the purchase orders.

## Issues

1. Whether an arbitration clause printed on a buyer’s purchase order, signed only by the buyer, constitutes an “agreement in writing” under Article II(2) of the New York Convention.
2. Whether a party’s performance and course of dealing can satisfy the Convention’s requirement of a signed arbitral agreement or an exchange of writings containing the arbitral clause.
3. Whether a district court may compel arbitration under 9 U.S.C. § 206 absent a Convention-compliant “agreement in writing.”

## Decision

- The Second Circuit reversed the order compelling arbitration.
- The court held the purchase-order arbitration clause was not an “agreement in writing” under Article II(2) because Lark never signed a contract containing the clause and there was no qualifying exchange of written communications containing the arbitration agreement.
- The court rejected reliance on domestic contract doctrines (such as assent inferred from performance) to satisfy the Convention’s threshold definition of “agreement in writing.”
- Because the Convention’s writing requirement was not met, the district court lacked authority under the Convention and 9 U.S.C. § 206 to compel arbitration.

## Legal Principles

- Under Article II(2) of the New York Convention, an “agreement in writing” exists only if the arbitral clause is in a contract or arbitration agreement signed by the parties, or if it is contained in an exchange of letters or telegrams (or equivalent written exchange recognized under the Convention’s text).
- The Convention’s definition of “agreement in writing” sets a threshold requirement that cannot be satisfied by domestic doctrines that infer assent from conduct alone.
- A federal court’s power to compel arbitration under 9 U.S.C. § 206 depends on the existence of a Convention-compliant arbitration agreement; without it, the court cannot compel arbitration under the Convention framework.

## Conclusion

The Second Circuit held that an unsigned arbitration clause appearing only on the buyer’s purchase-order form did not satisfy the New York Convention’s “agreement in writing” requirement, and it therefore reversed the order compelling arbitration under 9 U.S.C. § 206.


Kahn Lucas Lancaster, Inc. v. Lark Int'l Ltd., 186 F.3d 210 (2d Cir. 1999)