## Facts

- Stemcor USA, Inc. sold steel casings to Trident Steel Corporation under twelve sales transactions from October 2000 to April 2002.
- Each transaction began with Trident sending a purchase order containing a clause limiting the deal to its stated terms and requiring any modification to be “mutually agreed upon in writing.”
- Stemcor responded with acknowledgment forms (and later invoices) that included an arbitration clause providing for AAA arbitration in New York if negotiations failed.
- Trident never signed Stemcor’s acknowledgments and did not otherwise provide written assent to arbitration.
- After Trident modified and resold the casings to Texas oil well operators, the operators sued Trident in Texas state court alleging defects; Trident asserted third-party indemnity claims against Stemcor.
- Stemcor demanded arbitration and filed a federal petition under the Federal Arbitration Act to compel arbitration and to preliminarily enjoin the Texas third-party actions.
- The parties agreed the court could decide the petition to compel arbitration and the preliminary injunction request together.

## Issues

1. Whether an arbitration clause included in the seller’s acknowledgment became part of the parties’ contracts under New York law and UCC § 2-207.
2. Whether the buyer’s purchase-order term limiting acceptance to its own terms and requiring written mutual agreement for modifications prevented incorporation of the seller’s arbitration clause.
3. Whether federal policy favoring arbitration under the FAA could support compelling arbitration absent proof of mutual assent.

## Decision

- The court denied the petition to compel arbitration under FAA §§ 3–4.
- Because there was no enforceable arbitration agreement, the court also denied relief seeking to stay the Texas third-party actions.
- The court held the arbitration clause in Stemcor’s acknowledgment forms was not incorporated into the parties’ contracts.

## Legal Principles

- Arbitration depends on contract; a party may be compelled to arbitrate only if both parties agreed to do so.
- Under UCC § 2-207(1), a written confirmation with additional terms is generally an acceptance unless it is expressly conditional on assent to those terms.
- Under UCC § 2-207(2), additional terms between merchants do not become part of the contract if the offer expressly limits acceptance to its terms; a buyer’s clause requiring written mutual agreement can exclude a seller’s added arbitration provision.
- The FAA’s pro-arbitration policy does not create an arbitration agreement where mutual consent is not shown.

## Conclusion

Applying New York law and UCC § 2-207, the court concluded that Trident’s purchase orders expressly limited acceptance to Trident’s terms and required written mutual agreement to add or modify terms; because Trident never provided written assent to Stemcor’s arbitration clause, no agreement to arbitrate existed and arbitration could not be compelled.


Stemcor USA, Inc. v. Trident Steel Corp., 471 F. Supp. 2d 362 (S.D.N.Y. 2006)