Involving these absent parties in a case not only reduces the risk of multiple lawsuits related to the same dispute, but also reduces the risk of arbitral awards/contradictory submissions from different arbitrators. At the same time, it is a challenge for the arbitrator to balance the balance between party autonomy and parallel proceedings. Where a third party has the right to enforce a clause is subject to a clause providing for the submission of disputes to arbitration, Article 8(1) provides that the third party shall be treated as a party to this arbitration agreement in disputes between the third party and the promisor in relation to the third party`s performance of a substantive right under the contract. § 8 Abs. 2 Also provides that, where a third party has the right to perform an arbitration clause contained in a contract but does not fall within the scope of Article 8(1), the third party is to be treated as a party to the arbitration agreement if he exercises the right to enforce the arbitration clause. There are cases where the parties were bound by arbitration agreements to which they were not originally parties. We provide an overview of some of the most common scenarios and examples, including the « corporate group » doctrine, assignment, national succession and legal provisions of third party rights. Macintosh J. held that, in certain circumstances, non-signatories may be parties to arbitration agreements. These circumstances include when the plaintiff treats the defendant as the true contracting party.

Throughout the litigation, NWP asserted that defendants Yates and Tozman were the true parties. As a result, Macintosh J. stayed the trial in favour of arbitration. In other words, outsiders to the arbitration agreement could rely on the arbitration clause to stay related disputes. In Hong Kong, the Contracts (Rights of Third Parties) Bill was published on 28 February 2014 and will be submitted to the Legislative Council this year. It is proposed that if a third party and the promisor have a dispute over the performance of a clause of a contract, the third party should be treated as a party to the arbitration agreement within the meaning of the Arbitration Rules (Cap. 609), unless the third party is not contractually designated to do so (§ 12 of the Bill). This case provides an important analysis of one of the circumstances in which a third party may or may not be bound by an arbitration agreement and must be considered in the broader context of situations where third parties may be bound by arbitration agreements in contracts to which they are not parties. It also stresses that caution should be exercised when drafting transactional documents that may confer a right on a third party in order to ensure that the intentions of the parties with regard to the settlement of disputes involving those third parties are properly taken into account. A narrow interpretation of arbitration agreements may preserve the autonomy of the parties and limit the ability of third parties to join or intervene, but cannot serve the objectives of justice.

Although universal succession cannot take place under English law, English law recognizes the effect of merger by universal succession with respect to foreign companies located in jurisdictions that apply the concept. In Eurosteel Ltd v. Stinnes AG, the High Court considered how a merger of a German party by The Universal Succession would affect the arbitration proceedings pending at the time. It was confirmed that, under English law, all matters relating to the rights and obligations of a new merged company were governed by the law of the country of residence and, if the law of residence endowed the new company with the rights and obligations of the old company, that part of the statute of the new company had to be recognised by the English court. An analysis of the three themes (multiple arbitration, joinder of arbitrations and joinder of parts) highlights that these concepts are intertwined. The contract was governed by English law and contained an arbitration agreement (which provided for arbitration under the ICC rules with an English seat). It also contained disclaimers and indemnification provisions expressly stated in favour of managers against certain shareholder claims. Fortress` proceedings against the other partners were stayed under the S9 Arbitration Act 1996 due to the arbitration agreement in the contract. The key issue before the Court of Appeal was whether the managers were also entitled to a stay of the English legal proceedings against them in favour of arbitration. The managers attempted to invoke the arbitration agreement in the contract and ultimately the contractual exclusion in the contract to defend Fortress` claim.

However, French law goes even further and recognizes that the arbitration clause is also independent of national law. This independence is the result of a series of judgments of the Court of Cassation. Thus, in 1972, it held that an arbitration agreement could be governed by a law other than that governed by the underlying contract (Court of Cassation, 4 July 1972, Hecht v. Buisman`s). And in 1993, it recognized that an arbitration agreement was independent of any domestic law (Court of Cassation, 20 December 1993, Dalico v. Khoms and El Mergeb). The usual rule is that only parties who have entered into an arbitration agreement are required to settle their disputes through arbitration. The arbitration is consensual and the arbitration agreement waives the right of either party to rely on the jurisdiction of other courts of competent jurisdiction in favor of the arbitration. On 29 March 2019, the High Court of England and Wales, followed by the Court of Appeal of England and Wales on 20 January 2020, refused to enforce an arbitral award on the ground that it had been made against a non-party to the arbitration agreement in question. Meanwhile, on 23 June 2020, the Paris Court of Appeal, which refused to be bound by the English decisions, rejected the application for annulment of the same award in the case of Kabab-Ji SAL (Lebanon) against Kout Food Group (Kuwait) [CA Paris, 23 June 2020, No. 17/22943]. It thus upheld the findings of the arbitral tribunal and thus confirmed its jurisdiction over a third party of the arbitration agreement.

In March 2015, Kabab-Ji filed a motion for arbitration against KFG. In particular, KFG failed to fulfill its development obligations under the FDA and gained know-how for the development of its own restaurants without Kabab-Ji`s consent. The court issued its award in September 2017, upholding Kabab-Ji`s claims against KFG and ordering that more than $7 million plus interest be paid to Kabab-Ji. In some civil jurisdictions, it is common for mergers and restructurings to take place by universal succession, resulting in the full transfer of all assets, rights and liabilities from one company to another as of right. This can be done without the participation of the creditors or counterparties of the transferring company. With the constant evolution of the law, modern business transactions are often processed through multiple layers and agreements. There may be transactions within a group of companies, and the circumstances in which they were concluded may reflect the intention to bind both signatories and non-signatories within the same group. The solution adopted by the Paris Court of Appeal to extend the arbitration agreement to a non-signatory is also fully in line with French jurisprudence. The parties disagreed on the law applicable to the arbitration agreement. On the one hand, the KFG argued that the arbitral tribunal « should have applied English law to the arbitration agreement and, therefore, held that it did not have jurisdiction over the KFG » [para.

14]. Kabab-Ji, on the other hand, supported the Tribunal`s decision to apply French law, the law of the registered office, to interpret the arbitration agreement. The Paris Court of Appeal upheld Kabab-Ji`s reasoning and upheld the Tribunal`s conclusion that French law governs the arbitration agreement. If there is no justification for opening two independent arbitrations that would only lead to a variety of proceedings, the law should try to eliminate this difficulty as much as possible. The Bombay High Court therefore jointly submitted disputes arising from the two agreements to arbitration, even though one of the parties was only one party to an agreement and not the other. In doing so, the Court relied on the landmark decision of the Supreme Court of India. [2] Western Oil Sands Inc. (« Western ») filed a claim under an insurance policy issued by policyholders. The underwriters rejected the claim. Western commenced arbitration against the policyholders under an arbitration clause in the insurance policy.

In their defence, the underwriters asserted that Western`s agent and broker, Jardine Lloyd Thompson Canada Inc. (« JLT »), made false statements when obtaining the insurance policy. JLT was not a party to the insurance policy or arbitration. SJO Catlin (« Catlin »), one of the underwriters, asked the court for an order: Nevertheless, it is time for arbitration to develop, emerge and find advanced solutions to the stumbling blocks. .