Seller (Korea) v. Buyer (Jordan)

A Korean seller (plaintiff) entered into three contracts to sell goods to a Jordanian buyer (defendant). The Jordanian buyer had previously entered into a contract to sell to an Iraqi buyer the goods it purchased under the contracts with the Korean seller. The contracts between the Korean seller and the Jordanian buyer were executed in Korea and contained an arbitration clause stating that disputes should be submitted to final arbitration at the International Chamber of Commerce (ICC) in Paris. However, the arbitration clause was silent as to what substantive law should govern the merits of disputes arising under the contracts. A dispute arose between the parties, and the Korean seller initiated arbitration proceedings in France before the ICC. The Jordanian buyer refused to appoint an arbitrator as required by the arbitration clause, so the ICC selected an arbitral tribunal. The Jordanian buyer argued that the arbitration clause was invalid under a Jordanian law that stated agreements preventing Jordanian courts from exercising jurisdiction over disputes involving the sale and carriage of goods were not enforceable. The arbitral tribunal found that the Jordanian law did not apply to the contracts between the Korean seller and Jordanian buyer and, therefore, the existence of the Jordanian law did not render the arbitration clause invalid. The arbitral tribunal then turned to the question of what system of law should govern the merits of the dispute.