3 Incorporation of Arbitration Clauses and Reinsurance

English law provides us with a categorization system that classifies contracts depending on their structural formation and nature. The fundamental categorization is twofold: The first division is of ‘single-contract cases,’ and the second is of ‘two-contract cases.’1 The first category is essentially concerned with a single-layered contractual structure. Therefore, it is a straightforward category that deals with a single contract and, accordingly, with a singular contractual relationship deriving from a single contract between A and B.2 The second division, on the other hand, would involve two different contracts: a contract between A and B and a different contract between B and C, and B seeking to incorporate by reference into its contract with A the arbitration agreement contained in the agreement with C. As a matter of fact, the involvement of D in such a contractual structure is also not a rare occasion. Thus, the second division containing multiple contractual relationships, evidently, has more complex features. The examples of this sort of contractual structure are commonly seen in shipping, insurance, and construction contracts.3 For example, bills of lading would usually be incorporating the terms of the underlying charterparty, reinsurance contracts the terms of the insurance contract, and construction subcontracts the terms of the construction contract. Shipping cases dealing with the incorporation of charterparty terms into bills of lading have long established an authority regarding the implementation of incorporation. However, the ‘cross-fertilization’4 of these branches of law and, thus, the provided derivatives may not be overlooked. Therefore, this chapter focuses on the meaning, types, and nature of reinsurance and its relationship with the said areas of law in terms of methods of incorporation. One of the essential issues to be addressed is whether and the extent to which, if any, it is a legal necessity to follow the settled implementations of the said branches of law in the reinsurance context.