'96. The issues to be determined by the Tribunal as specified in the Terms of Reference are identified ... as follows:

a. Does the Tribunal have jurisdiction to determine the disputes between the parties to this arbitration?

b. Is the Claimant the successor-in-interest to [X]?

We address these two issues together, because they overlap. Although [Respondent] did not take part in the arbitration proceedings, it did make a submission to the ICC on this issue by pleas as to non-existence of agreement to arbitrate ... and the Tribunal took them into account when considering these issues. The Tribunal was persuaded, however, by the evidence adduced by the Claimant and by consideration of the law, that both of these issues should be answered affirmatively.

97. [Respondent] does not deny that it was a party to the SR [Sales Representative] Agreement and the CSW [Consigned Stock and Warehousing] Agreement or that the Agreements contained the arbitration provisions quoted [earlier]. On the contrary, [Respondent] said in its pleas as to the non-existence of agreement to arbitrate ... that it was one party to the Agreements and that [X] was the other party. What [Respondent] denies is that the Claimant was a party to either of the Agreements or that the Claimant succeeded to [X]'s interest in the Agreements so as to claim the benefit of the arbitration provisions.

98. Apart from containing an arbitration provision, the SR Agreement, to which (with the CSW Agreement) [Respondent] is admittedly a party, contains an express choice of law. Thus, in deciding who has rights and obligations under the SR Agreement, the starting point must be to consider the law chosen by the original parties to that agreement, namely, [Respondent] and [X].

99. Article 10.7 and 11.4 of the SR Agreement refer to the laws of [the State of] Texas insofar as applicable and the laws of the United States of America. According to our interpretation of the SR Agreement, the latter are the Federal Laws of the USA, and the proper laws to govern the interpretation of the SR Agreement and the right and obligations arising out of that agreement and its termination are the laws of Texas. Nevertheless, as will be mentioned again later, we sought expert evidence on both laws and received it in the form of affidavits ...

100. In Article 10.7 there was also a reference to the "country in which the arbitration is held", namely France, but having carefully read that clause with clause 11.4, we concluded that the parties intended that the laws of Texas should govern the whole of the SR Agreement, including the interpretation of the arbitration clause, and that French law would only apply if there were any mandatory provisions affecting the conduct of the arbitration in Paris, France. No such provisions came to our attention.

101. Although the CSW Agreement does not contain an express choice of law, it was concluded on the same date as the SR Agreement and was made between the same parties. The CSW Agreement is apparently subsidiary to the SR Agreement in that it provides warehousing for goods received by [Respondent] from [X] and its predecessors pursuant to the SR Agreement. According to [a witness]'s testimony, it was requested by [Respondent's president] for that purpose. Taking account of the circumstances in which the CSW Agreement was made and its purpose, the Tribunal concludes that the original parties to the CSW Agreement (who were the same as the parties to the SR Agreement) intended that the laws of Texas and of the United States of America should apply to this agreement in the same way as they were expressed to apply to the SR Agreement. Accordingly, we conclude that the laws to govern the interpretation of the CSW Agreement and the rights and obligations arising out of that agreement and its termination are the laws of Texas.

102. In coming to our conclusion as to the rules of law to govern the merits of the dispute, the Tribunal also had regard to Article 17 of the ICC Rules of Arbitration.1 Thus, apart from our interpretation of the Agreements themselves and the circumstances in which they were made, the Tribunal determined that the laws of Texas were the appropriate, applicable laws. Nevertheless, despite our conclusion that the laws of Texas were applicable for determining the issues in this arbitration, including those of our jurisdiction, we also gave consideration to the laws of Guatemala. In respect of the jurisdiction issues, we gave particular consideration to Article 291 of the Code of Commerce of Guatemala. That article is quoted in full in paragraph 63 above.2 The last sentence states that arbitration proceedings should take place, be substantiated and resolved in the Republic of Guatemala in accordance with the national laws applicable to judicial or arbitral procedures.

103. Although neither party made any specific mention of the last sentence of Article 291, the Claimant did emphasise that the article was amended and restated as quoted, by virtue of Decree 8-98 of Congress. That decree introduced amendments to the Code of Commerce that only became legal and effective in February, 1998, many years after the parties entered into the Agreements. Indeed, when the Agreements were concluded, there were no rules in Guatemala containing similar restrictions on the place of an arbitration. The SR Agreement was made under the period of application of Decree 78-71. Prior to February, 1998 (when Decree 8-98 became effective) there were no restrictions in general to the choice of arbitration as the means for resolving disputes relating to agency, distribution and representation agreements. Under Article 1039 of the Code of Commerce of Guatemala, it has always been a well-established principle that for any commercial disputes, parties can select arbitration. That Article (1039) has been in effect without amendment since 1970. Further, in 1984, more than a year before the Agreements were signed, Guatemala became a full state party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("the New York Convention") subject to two reservations.3

104. Having given careful consideration to the matter, we have concluded that the last sentence of Article 291 of the Code of Commerce does not restrict the choice made by the parties as to the place and rules for these consolidated arbitrations. As explained in the preceding paragraphs, the restriction did not exist when the Agreements were concluded and retroactivity of law is prohibited in the legal system of Guatemala up to the level of the Constitution of the Republic. Further, Article 1039 of the Code of Commerce of Guatemala, as mentioned in the preceding paragraph, allows parties to agree upon arbitral provisions in their contractual arrangements, even favouring the use of arbitration as the means to resolve disputes without any restriction to the freedom of the parties specifically to agree upon the place and rules of such arbitral provisions. Since 1984, the New York Convention has been incorporated into the legal system of Guatemala and Article II of that Convention specifically provides for the full recognition and enforcement of Arbitral Agreements when they are related to international commercial agreements such as in the present case. Thus, even if the laws of Guatemala did apply to the issues of this dispute, the choice of the place and rules for these arbitration proceedings would have been valid. However, we have found that the parties chose the laws of Texas to apply to their dispute.

105. Having decided on the appropriate laws to be applied to the issues, the Tribunal turns to consider whether [Claimant] was a successor-in-interest. As already mentioned, the Claimant adduced written and oral evidence that, through various transactions referred to [earlier], [Claimant] did succeed to the interest of [X] in respect of the Agreements. The Tribunal examined each of the relevant documents exhibited to the Claimant's September submission and concluded, after hearing the evidence mentioned hereafter, that the transactions evidenced by the documents did support the Claimant's contention of succession in interest as demonstrated in those exhibits. At the hearing, the Tribunal also received testimony from [a witness] which verified the written evidence ... That evidence was further confirmed by the affidavit of [Claimant's senior legal assistant] filed with the Claimant's post-hearing brief.

106. The Tribunal also considered the means by which the succession of interest was achieved bearing in mind the provisions of the SR Agreement and the CSW Agreement about assignments ... On the basis of the written and oral evidence presented to us by the Claimant, as described in the preceding paragraph, and our interpretation of the transactions, we concluded that the succession was achieved by means of a pooling of interests which did not give rise to an assignment within the meaning of that term as used in Article 8 of the SR Agreement and the Conclusion to the CSW Agreement.

107. Although not strictly necessary, given the finding in the preceding paragraph, the Tribunal also considered evidence of [Respondent]'s conduct insofar as it is relevant to the two issues specified above. Documentary evidence in the form of exhibits to the Claimant's September submission, which have already been referred to in this Award, revealed the following:

• for a period of some 27 months prior to the receipt of notice of termination, [Respondent] purchased goods from [Claimant], and paid the proceeds of sale to [Claimant] without any protest;

• on receipt of the notices of termination, [Respondent] addressed its correspondence, including certain offers, to [Claimant] without questioning why [Claimant] rather than [X] were seeking to terminate the Agreements; and

• in proceedings initiated in Guatemala, [Respondent] claimed damages from [Claimant] on the basis that "the Principal, originally [X] … merged with [Claimant]" ...

108. In addition to the documentary evidence referred to above, the Tribunal received written and oral testimony from [a witness]. He explained that, prior to termination of the Agreements, he wrote to [Respondent] and spoke to [its president], and that he had no doubt that [Respondent] was aware by the year 2000 that [Claimant] had succeeded to the rights formerly enjoyed by [X] under the Agreements. Indeed, it is clear from the evidence of [Respondent]'s dealings with [Claimant] over a period of more than two years and its understanding as expressed in the [state court] proceedings that [Respondent] knew and accepted that [Claimant] had succeeded to [X]'s interests in the Agreements. The fact that [Respondent] referred to a merger rather than a pooling of interests suggests that [Respondent] may not have understood precisely how the succession came about but we are convinced that, had [Respondent] asked, it would have been told. We are satisfied from [the witness]'s testimony that [Claimant] did not hide its true role from [Respondent]. All the evidence points to the fact that [Respondent] consented to treat with [Claimant] in the place of its predecessors and did so for many months prior to termination.

109. On the basis of the evidence stated in the preceding paragraphs, the Tribunal finds that by no later than the end of 2000, [Respondent] was aware that [Claimant] had taken over from [X] as the other party to the Agreements, and was content to deal with [Claimant] and did so deal from that time on. This attitude of [Respondent] was borne out in its reaction to the notices of termination where [Respondent]'s President ... wrote to [Claimant], and by the offer of [Respondent]'s lawyer ... to enter into settlement discussions "with [Claimant]". [Respondent]'s claim of damages from [Claimant] in the [state court] proceedings confirmed a situation that had already occurred, namely [Claimant's] succession to the rights of [X] under the Agreements and [Respondent]'s acceptance of that situation. Insofar as it is necessary, the Tribunal finds, for the reasons just stated, that [Respondent] waived any right to rely on the assignment provisions in the Agreements and is estopped by its conduct from denying that [Claimant] succeeded to the interest of [X] in respect of the SR Agreement and the CSW Agreement.

110. In the light of our findings on the second issue specified above, a proper interpretation of the Agreements in accordance with the applicable laws led us to the conclusion that the Tribunal has jurisdiction to determine the dispute between the parties to this arbitration, namely, [Claimant] and [Respondent]. The scope of the arbitration clause contained in the SR Agreement ... is in very wide terms and on its face appears to extend to the claims arising out of the termination of that agreement. The arbitration clause in the CSW Agreement is not so wide in scope. It ... provides that a dispute arising between the parties as to the "interpretation or application of the Agreement or any part thereof" shall (failing amicable resolution) be submitted to arbitration. As is apparent from the evidence submitted in this arbitration, the parties were unable to resolve their dispute amicably and determination of the dispute has required consideration of the terms of the CSW Agreement as well as the SR Agreement and the application of both of the Agreements, which were concluded on the same day ... Thus, despite the narrower scope of the arbitration clause in the CSW Agreement, we have concluded that the parties' dispute necessarily involves the application of the CSW Agreement and so falls squarely within the words of the arbitration clause in that agreement. Further, we accept the Claimant's submission as to how the Agreements, being governed by the laws of Texas, should be interpreted. Applying the general rule referred to in Jones v. Kelly [614 S.W.2d 95, 98 (Tex. 1981)] and attempting to reconcile the words used in the Agreements to discern the intention of the parties, the Tribunal finds that the arbitration clause in the CSW Agreement (as well as that in the SR Agreement) extends to claims arising out of the termination of the Agreements.

111. The Tribunal also considered [Respondent]'s argument, apparently raised in the [state court] proceedings, that the arbitration clauses did not survive [Claimant's] termination of the Agreements. We cannot accept that argument, however, because it contradicts the well-established doctrine of severability, which provides that an arbitration agreement forming part of another agreement (as in this case) should not be regarded as invalid, non-existent or ineffective because the other agreement has been terminated; rather the arbitration clause is to be treated as a distinct and independent agreement for that purpose (see, for example, Article 16(1) of the UNCITRAL Model Law on International Commercial Arbitration adopted on 21 June 1985). This doctrine is embodied in the ICC Rules of Arbitration, Article 6(4), which provides expressly that the Tribunal shall continue to have jurisdiction to determine the respective rights of the parties and to adjudicate on their claims and pleas even though the contract itself may be non-existent or null and void.

112. The Tribunal considers that it should make every effort to ensure that the Award is enforceable in law. Although we have found that the laws of Texas are the appropriate laws to determine the dispute referred to us in this arbitration, we have also considered whether any decision of ours might offend public policy under the laws of Guatemala, which is the place of [Respondent]'s domicile. We concluded that it did not, because that law also recognises the right of parties to select arbitration as a means of resolving this type of dispute and fully recognises the binding nature of an arbitration agreement and the competence of an arbitral tribunal to determine its own competence or jurisdiction. Therefore, there are no considerations relating to potential "public policy issues" in this case in the event that any issue should arise as regards the recognition or enforcement of this Award.'

1
Editor's note: This and subsequent references are to the 1998 ICC Rules of Arbitration.

2
Editor's note: The relevant part of paragraph 63 reads as follows: 'An English translation of Article 291 reads as follows: "Controversies. When the parties do not agree, after occurrence of the termination or rescission of the contract or respective relation as to the amount of the indemnity which should be paid for damages caused in the cases provided for at numerals 4 and 5 of the foregoing article, the amount thereof should be determined judicially in summary jurisdiction, in which case the plaintiff shall propose the opinion of experts, according to the provisions of the Civil and Mercantile Procedural Code, in order for a ruling to be handed down in the process as to the existence and amount of the damages claimed. In the respective contract or after occurrence of the cause, the parties may also opt for arbitration to resolve any class of controversies derived from the said contract. In all cases, both judicial and arbitral proceedings shall take place, be substantiated and resolved in the Republic of Guatemala in accordance with the national laws applicable to judicial or arbitral proceedings."

3
When Guatemala ratified the NY Convention, it did it with two reservations: a) applicable only to cases of an international and commercial nature; and b) under the principle of reciprocity.