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Multiparty
Arbitration
D O S S I E R S
ICCInstituteofWorldBusinessLaw
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CoNTENTs
FOREWORD ...................................................................................................................5
by serge Lazareff
INTRODUCTION..............................................................................................................7
Multiparty Arbitration by Bernard Hanotiau, co-editor
1 Fernando Mantilla-serrano.......................................................................11
Multiplepartiesandmultiplecontracts:divergentorcomparableissues?
3. Kristof Cox.....................................................................................................49
Dpeage orconsolidationofthedisputesresultingfromconnected
agreements:theroleofthejudge
4. Karim Youssef................................................................................................71
Thelimitsofconsent:therightorobligationtoarbitrateof
non-signatoriesingroupsofcompanies
6. Georgios Petrochilos.................................................................................119
Theextentionofthearbitrationclausestoanon-signatorystateorstate
entities:Doesitraisedifferentissues?
3
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MULTIPARTy ARBITRATION
8. sbastien Besson........................................................................................147
Piercingthecorporateveil:backontherighttrack
CONCLUDINGREMARKS..........................................................................................235
by Eric A. schwartz, Co-Editor
KEy-WORDSINDEX.....................................................................................................241
CONTRIBUTORS..........................................................................................................263
ICCATAGLANCE........................................................................................................273
4
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FoREwoRD
BY sERGE LAzAREFF
MemberoftheParisBar;
Chairman,ICCInstituteofWorldBusinessLaw
OneofthemostpleasantyearlytasksoftheChairmanoftheInstituteisto
writetheforewordtoourrecurrentDossier.Thisisespeciallytrueforthis
publication,asthiswillbemylastforewordbeforeIleavetheInstituteatthe
endoftheyear.
Iamverygratefultoallourfriendswhohavecontributedtoeacheditionof
theDossieroverthepastyearsandhavethuscontributedtotherenownof
theInstitute.
Themixtureoftheoreticalknowledgeandthepragmatismofpractitioners,
the quality of the writers, the fine-tuning of their contributions and the
dedication of the successive co-editors have allowed the ICC Institute to
continuepublishingtheDossiers,nowvaluedworksofreference.
Thisedition,preparedunderthekeensupervisionofbothco-editors,Bernard
HanotiauandEricA.Schwartz,isnoexception,anditisaprivilegeformeto
introduceit.Withthedevelopmentofarbitration,thenumberofmultiparty
casesisconstantlyincreasing.Asthestatisticsfor2009show,28.5%ofICC
casesinvolvedmultipartyissues.Thishasraisedquestionsofanacademicand
practicalnature.Eachissueissplendidlydiscussedinthisbook,whichtouches
uponallaspectsofthistopic.
Asusual,thecontributorstothisissuehaveproducedsomeofthebestwork
inthisarea.
5
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MULTIPARTy ARBITRATION
ThisDossier,aswellastheInstitutesactivities,bothasathink-tankforICC
andasatrainingcentre,wouldnothavebeenpossiblewithoutthehardwork
ofLaetitiadeMontalivet,DirectoroftheInstitute.Sonprofessionnalisme,sa
fineintelligence,saconstanteloyaut(unesirarequalit!),saconnaissance
dumondedesaffairesetdesesprincipauxacteursontconsidrablement
contribuaucoursdesderniresannesauxactivitsdelInstitut.Quelleen
soit ici remercie ainsi que sa charmante et brillante quipe Katharine
Bernet,SybilledeRosny-Schwebeletlesautres.
Goodlucktoallofyou.
6
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INTRoDUCTIoN
BY BERNARD HANoTIAU*
Co-EDIToR
ThefirstseminaroftheICCInstitute,whichtookplacethirtyyearsago,was
devotedtothesubjectofmultipartyarbitration.Sincethen,manydevelopments
havetakenplaceinthisarea.TheCounciloftheInstitutethereforedecided
toselectthesamesubjectmatterforits30thanniversaryseminar.Thetopic
isalsooftheutmostimportanceincurrentarbitrationpractice.Accordingto
ICC statistics, approximately 30% of all arbitrations governed by its rules
involvemultiplepartiesand/ormultiplecontracts.
Where a dispute arises that involves more than two parties, a series of
contractsandmultipleissues,theplaintiffsorpotentialplaintiffsmaynotbe
inapositiontobringthevariousdesireddefendantstoonesinglearbitration
proceeding.Arbitrationis,indeed,consensualbynature,withtheconsequence
thatprivityofcontractappliestothearbitrationclause,limitingitseffectto
thecontractingpartiesalone.Joiningnon-signatoriesorthirdpartiesoften
provesdifficult,sometimesimpossible.
Theissuesraisedbymultiparty,multicontractarbitrationaremultiple.They
include:
- Whoarethepartiestothecontractand/orthearbitrationclause
containedtherein?
- Mayanarbitrationclausebeextendedtonon-signatories?Doesthe
factthattheissuearisesinrelationtogroupsofcompaniesmakea
difference?
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MULTIPARTy ARBITRATION
- Towhatextentcanonebringtoasinglearbitrationproceedingthe
variouspartiesthathaveparticipatedinasingleeconomictransaction
throughseveralcontracts?
- Mayanarbitraltribunalthatishearingadisputethatarisesprincipally
fromaspecificcontractdecideissuesarisingfromconnected
agreementsenteredintobythesameparties,possiblyalongside
othercontractors?
- Ifseparatearbitrationproceedingsneedtobestarted,canthese
differentproceedingsbeconsolidatedandunderwhatconditions?
- Iftheycannotbeconsolidated,howandtowhatextentcanoneover
come the inconveniences that arise from having several parallel
proceedings?
- Who can act as claimant and against which defendants? Can a
defendant join other defendants, be they privy to the arbitration
agreementorthirdparties?Canapartytothecomplexcontractual
structureintervenevoluntarilyintheproceedings?
- Whenthereareseveraldefendantswhohavedivergentinterestsand
thereforedonotwanttoappointthesamearbitrator,howdoesone
goaboutconstitutingthearbitralpanel?
- Canadefendantinthearbitrationproceedingsbringaclaimagainst
anotherdefendant?
- Howdoesonehandlethesecomplexorparallelproceedingsinthe
interestsofthebestadministrationofjustice?
- What are the consequences of the answers to the above questions
fortheenforceabilityoftheaward?
- Towhatextentshouldanarbitraltribunaltakeintoconsiderationan
arbitralawardrenderedinaconnectedarbitrationarisingfromthe
sameproject?
- Isclass-widearbitrationpossibleanddesirable?
It was of course impossible to deal with all these topics in one day. The
organizers therefore decided to concentrate on some hot topics and
fundamentalissues.
Oneofthemainproblemsarisingfrommultipartyarbitrationistheintellectual
confusionthatreignsinthisfield.Thisconfusionhasbeengeneratedbyun-
fortunatecourtdecisionsandarbitralawards,nottomentionpoorlywritten
legal articles, which, unfortunately, are legion in this area. For example, a
clearmethodologicaldistinctionshouldbemadeandunfortunatelyisnot
often made between issues arising from the fact that the project at the
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INTRODUCTION
centreofadisputehasbeennegotiatedandperformedbyoneormorecom-
panies that belong to a group, some of which are not signatories to the
arbitrationclause,andissuesarisingfromthefactthatthedisputeconcerns
problemsoriginatingfrom,orinconnectionwith,twoormoreagreements
enteredintobythesameand/ordifferentpartiesthatdonotallcontainthe
sameoratleastcompatiblearbitrationclause(s).Itwasthereforedecided
todevotethefirstpartoftheseminartothedistinctionbetweengroupsof
contractsandgroupsofcompaniesaretheytwodifferentsubjects?Once
thedistinctionhasbeenclarified,thefollowingquestionremains:onwhat
basis should the judge or the arbitrator decide to treat separately or
consolidate the disputes resulting from connected agreements, which in
somecasesconstituteasingleeconomictransaction?
Asindicatedabove,confusioninthecaselawanddoctrinalwritingshascom-
plicatedissuesthatattheoutsetwererelativelysimple.Forexample,reference
is very often made to a so-called group of companies doctrine. The
undersignedconsidersthatthisdoctrineistotallyunnecessaryandconfusing.
Inthesamevein,alotofconfusionsurroundsthetheoryofpiercingthecor-
porateveilwhichrightlyorwronglyhasfromtimetotimeallowedtheex-
tensionofanarbitrationclausetoanon-signatory.Askingtwodistinguished
speakerstoputthetwodoctrinesbackontrackwasthereforejudgedap-
propriate.
Itwasfinallydecidedtodevotethelastpartoftheseminartoenforcement
issueswhichareparticularlysensitiveinmultiparty,multicontractcases
andtoatopicthathasacquiredgreatimportanceintheoryandpracticein
theUnitedStates:classactionarbitrations.