On January 25, 2022, Justice Platkin of the Albany County Commercial Division issued a decision in Matter of New York State Dept. of Health (Rusi Tech. Co., Ltd.), 2022 NY Slip Op. 50041(U), holding that when the dispute resolution provisions of the English and foreign language versions of an agreement conflict, there is no agreement to arbitrate, explaining:
The Export Contract is a single document drafted in both the English and Chinese languages. The English language text states that all disputes “shall be settled through friendly consultation”, and the English text “shall prevail” in the event of “any discrepancies between the two versions”.
However, the Chinese language text states that any disputes not resolved through friendly consultation shall be resolved through binding arbitration administered by CIETAC, and the Chinese text shall prevail in the event of any conflict. The Chinese text further provides that the Export Contract shall be governed by the laws of China, and the United Nations Convention on Contracts for the International Sale of Goods (Vienna 1980) shall not apply to the transaction.
Dispute resolution also is addressed in the Purchase Order, a document drafted in English that DOH sent to Rusi after signing the Export Contract. Appendix B requires all disputes concerning international sales transactions that cannot be resolved through friendly consultation to be resolved through binding arbitration in New York administered by the International Chamber of Commerce.
. . .
DOH contends that the parties did not agree to arbitrate before CIETAC, and, if anything, Appendix B of the Purchase Order requires any disputes concerning the purchase transaction to be arbitrated in New York before the ICC.
In its one-page “Answer Brief,” Rusi argues that the Chinese language text of the Export Contract is controlling, and there is no conflict between the English and Chinese texts inasmuch as the English version is silent as to arbitration. Rusi further contends that Appendix B of the Purchase Order does not affect or change the arbitration clause in the Export Contract because Appendix B is a unilateral document of NY DOH and cannot replace the Export Contract signed by both parties.
For essentially the same reasons stated in Part A, supra, the Court concludes that there was no meeting of the minds between the parties as to the Chinese text purporting to require binding arbitration before CIETAC. By proposing to DOH an Export Contract consisting of parallel Chinese and English provisions and assuring its American purchaser that the English text was controlling, Rusi knew (or must have known) that DOH’s subjective intentions would be formed on the basis of the English text, which is precisely what happened here.
Further, DOH’s reliance on the English text was objectively reasonable under the circumstances and consistent with the parties’ prior course of dealing. Thus, this is not a case where a party simply failed to read and/or understand the terms of an agreement that included an arbitration clause.
Finally, contrary to Rusi’s contention, the Chinese text requiring binding arbitration is fundamentally inconsistent with the English version, which does not impose such an obligation. Arbitration, of course, is a matter of contract, grounded in the mutual, affirmative agreement of the parties.
The Court therefore concludes that the Export Contract does not constitute an express, unequivocal agreement to arbitrate before CIETAC. Accordingly, DOH’s application to permanently stay the CIETAC arbitration must be granted.
(Internal quotations and citations omitted).