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This case concerns proceedings initiated in the Supreme Court of Bermuda by Skandia International Insurance Company and other insurance companies ("Skandia and others") for an injunction to restrain Al Amana Insurance and Reinsurance Company Limited ("Al Amana") from continuing legal proceedings against Skandia and others in Kuwait.

Skandia and others were reinsurers of Al Amana, a company incorporated under the laws of Bermuda, in respect of real and personal property located in Kuwait and belonging to Alghanim Industries ("Alghanim") and its associated companies. Alghanim sustained extensive property damage in Kuwait during and consequential to the invasion of Kuwait by Iraq in August 1990. Disputes arose as to whether the losses sustained by Alghanim were excluded by virtue of a War Risks Exclusion Clause contained in the reinsurance agreements between Al Amana and Skandia and others.

Al Amana was sued by Alghanim in Kuwait and joined Skandia and others as third parties. Skandia and others argued that the Kuwaiti court had no jurisdiction over them as there were arbitration provisions in the reinsurance agreements with Al Amana. In the meantime, Skandia and others served notices of arbitration on Al Amana and initiated the proceedings in the Supreme Court of Bermuda for an injunction to restrain Al Amana from continuing legal proceedings against them in Kuwait on the ground that there existed an agreement to have their disputes determined by arbitration "at the seat of the defendant party" (i.e., Bermuda).

Al Amana challenged, inter alia , the existence of an arbitration clause in one of the reinsurance agreements. Al Amana argued that article 7(2) MAL requires that, for incorporating an arbitration clause by reference into another document, the reference has to be "such as to make that clause part of the contract." Al Amana submitted that a reference to insurance coverage "as per wording attached" simply incorporated the description of the risks in respect of which reinsurance was effected, but could not incorporate the entirety of the policy and was inadequate to incorporate the arbitration clause contained in another document.

The Supreme Court held that there was prima facie evidence that the arbitration agreement existed and satisfied the requirements of article 7(1) MAL and Article II(2) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958). The Supreme Court held, under reference to the travaux préparatoires of the MAL, that the contractual documents do not need to make an explicit reference to the arbitration clause and that general words of incorporation suffice under article 7 MAL. The Supreme Court pointed out, however, that, in any event, a challenge to the existence, validity and scope of the arbitration agreement was a matter to be first determined by the arbitral tribunal under article 16(3) MAL. Accordingly, the Supreme Court granted the injunction restraining Al Amana from continuing with the proceedings brought by it against Skandia and others in Kuwait.

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