Originally from American Review of International Arbitration - ARIA

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I. INTRODUCTION

Marc Rich, the fugitive financier already familiar to students of tax fraud and transnational criminal procedure,1 has now left his mark on the jurisprudence of international commercial arbitration. Marc Rich & Co. A.G. v Societa Italiana Impianti P.A.2 presented the European Court of Justice (“ECJ”) with-.an important opportunity to explore a question of primary importance to arbitration in Europe3 — the scope of the “arbitration exception” to the 1968 Brussels Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters,4 the agreement by which the Member States of the European Community (“EC”) have sought to delineate the valid bases of personal jurisidiction in transnational disputes and facilitate the enforcement of judgments throughout the Community.
In holding that the Convention does not apply to litigation before Member State courts concerning the appointment of an arbitrator, even if the existence or validity of an agreement to arbitrate is a preliminary issue in that litigation, the ECJ significantly enhanced the independence and viability of international arbitration in Europe. Yet the sparseness of the Court’s opinion renders the analytical underpinnings of its decision somewhat unclear, while its narrow framing of the issue presented leaves important questions unanswered. A complete analysis of the case’s importance requires both a more detailed review of the record before the Court and an examination of the broader issues which it chose not to address.
II. FACTUAL AND PROCEDURAL BACKGROUND

The dispute reached the ECJ by the circuitous route typical of such cases.5 In a January 1987 telex, Marc Rich & Co. A.G. (“Rich & Co.”), one of the financier’s eponymous Swiss holdings, offered to purchase a significant quantity of Iranian crude oil from Societa Italiana Impianti P.A. (“SIP”). SII accepted the offer the next day, subject to certain conditions to which Rich & Co. acceded. Two days later, Rich & Co. sent another telex setting out the contract terms, which included an English choice of law provision and a clause providing for the arbitration of all disputes before a three-person panel in London.6 SII never responded to the second telex, yet proceeded to load Rich & Co. Y nominated vessel with the Iranian oil in early February, On the day loading was completed, Rich & Co. complained that the cargo was seriously contaminated and claimed that it was entitled to more than US$ 7 million in compensation from SII, which denied all liability.