§ 172.003.International Agreement

Title 7. Alternate Methods of Dispute Resolution · Chapter 172. Arbitration and Conciliation of International Commercial Disputes · Subchapter A. General Provisions · Last amended 1997 · Last verified August 29, 2026

In one sentenceSection 172.003 makes an agreement international when the parties’ places of business are in different states, a key place lies outside a party’s state, the parties expressly agree the subject matter is multi-state, or the relationship otherwise reasonably relates to more than one state.

Full Text of § 172.003

Text sizeJump to: (a) (b) (c) (d)

(a)An arbitration or conciliation agreement is international if:

(1)the places of business of the parties to the agreement are located in different states when the agreement is concluded;

(2)any of the following places is located outside any state in which a party has a place of business:

(A)the place of arbitration or conciliation determined under the arbitration or conciliation agreement;

(B)a place where a substantial part of the obligations of the commercial relationship is to be performed; or

(C)the place with which the subject matter of the dispute is most closely connected;

(3)each party has expressly agreed that the subject matter of the arbitration or conciliation agreement relates to commercial interests in more than one state; or

(4)the arbitration or conciliation agreement arises out of a legal relationship that has another reasonable relation with more than one state.

(b)Subsection (a)(4) applies without regard to whether the legal relationship is contractual.

(c)For purposes of this section, the place of business of a party who has more than one place of business is the place that has the closest relationship to the arbitration or conciliation agreement. If a party does not have a place of business, the party's place of business is the party's habitual residence.

(d)For purposes of this section, the states of the United States and the District of Columbia are one state.

End

Plain-English Summary

Half of the chapter’s gateway, and it is drawn to catch genuine cross-border commerce.

The first test is the simplest. The parties’ places of business are located in different states when the agreement is concluded.

The second looks at three places. The agreement is international if any of them lies outside a state where a party has a place of business.

Those places are the seat, the performance and the subject matter — the place of arbitration or conciliation, a place where a substantial part of the commercial obligations is to be performed, or the place most closely connected with the subject matter of the dispute.

The third test is agreement. Each party has expressly agreed that the subject matter relates to commercial interests in more than one state.

The fourth is a catch-all. The agreement arises out of a legal relationship that has another reasonable relation with more than one state, contractual or not.

Multiple places of business are resolved by closeness. The relevant place is the one with the closest relationship to the agreement.

A party with no place of business is located at its habitual residence.

The last subsection is the one to read twice. For purposes of this section, the states of the United States and the District of Columbia are one state.

That collapses domestic interstate commerce into a single state. A Texas company dealing with a New York company is not international here; the chapter is aimed past the national border.

Frequently Asked Questions

What makes an arbitration agreement international?

Places of business in different states, a seat, place of performance or subject matter outside a party’s state, an express agreement that the subject matter is multi-state, or another reasonable relation with more than one state.

Is a Texas–New York agreement international?

No. For this section the states of the United States and the District of Columbia count as one state.

What if a party has several places of business?

The relevant one is the place with the closest relationship to the agreement; a party without a place of business is located at its habitual residence.

Amendment History

Added by Acts 1989, 71st Leg., ch. 109, Sec. 1, eff. Sept. 1, 1989. Redesignated from Vernon's Ann.Civ.St. art. 249-3 and amended by Acts 1995, 74th Leg., ch. 588, Sec. 1, eff. Sept. 1, 1995. Amended by
Acts 1997, 75th Leg., ch. 165, Sec. 5.02, eff. Sept. 1, 1997.

Source & verification. Section text is reproduced verbatim from Texas Legislature Online (statutes.capitol.texas.gov). Enacted by the Texas Legislature. Current through May 14, 2026. Last verified August 29, 2026. · Official source