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Multiparty
Arbitration

D O S S I E R S
ICCInstituteofWorldBusinessLaw
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This text is the work of independent authors and does not necessarily
represent the view of ICC. No legal imputations should be attached to
the text and no legal responsibility is accepted for any errors, omissions
or misleading statements caused by negligence or otherwise.

Copyright 2010
International Chamber of Commerce

Allrightsreserved.Nopartofthisworkmaybereproducedorcopiedinanyformor
byanymeansgraphic,electronic,ormechanical,includingphotocopying,scanning,
recording,taping,orinformationretrievalsystemswithoutwrittenpermissionof
ICCSERVICES,PublicationsDepartment.

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ICC Publication No. 701E


ISBN:978-92-842-0083-2
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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?

2. stephen R. Bond ..........................................................................................35


Dpeage orconsolidationofthedisputesresultingfromconnected
agreements:theroleofthearbitrator

3. Kristof Cox.....................................................................................................49
Dpeage orconsolidationofthedisputesresultingfromconnected
agreements:theroleofthejudge

4. Karim Youssef................................................................................................71
Thelimitsofconsent:therightorobligationtoarbitrateof
non-signatoriesingroupsofcompanies

5. John M.Townsend ......................................................................................111


Extendinganarbitrationclausestoanon-signatoryclaimantora
non-signatorydefendant.doesitmakeadifference?

6. Georgios Petrochilos.................................................................................119
Theextentionofthearbitrationclausestoanon-signatorystateorstate
entities:Doesitraisedifferentissues?

7. Yves Derains ...............................................................................................131


Isthereagroupofcompaniesdoctrine?

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MULTIPARTy ARBITRATION

8. sbastien Besson........................................................................................147
Piercingthecorporateveil:backontherighttrack

9. simon Greenberg, Jos Ricardo Feris and Christian Albanesi......161


Consolidation,joinderandcross-claims:multi-partyandmulti-contract
arbitration-recentICCexperience

10. s.I strong......................................................................................................183


ClassarbitrationoutsidetheUnitedStates:readingthetealeaves

11. Gerard Asken...............................................................................................215


Classactionsinarbitrationandenforcementissues:anarbitratorspointof
view

12.Pierre Mayer ...............................................................................................223


Theeffectsofawardsrenderedinmultiparty-multicontractsituations

CONCLUDINGREMARKS..........................................................................................235
by Eric A. schwartz, Co-Editor

KEy-WORDSINDEX.....................................................................................................241

CONTRIBUTORS..........................................................................................................263

ICCATAGLANCE........................................................................................................273

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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.

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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.

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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?

Groups of companies have developed considerably in recent decades and


withthemtheissueofthepossibleextensionofanarbitrationclausetonon-
signatories,althoughtheissuedoesnotonlyariseinrelationtogroupsof
companies but also to individuals within the group or to states and state
entities.Alothasbeensaid,decidedandwrittenonthetopic.Theorganizing
committee therefore decided to concentrate on fundamental issues and
currentproblems,suchasthelimitsofconsent,whetheritmakesadifference
if the issue of extension arises in relation to a non-signatory claimant or a
non-signatory defendant and the extent to which the extension of the
arbitrationclausetoanon-signatorystateorstateentityraisesdifferentissues.

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.

Moreover, one cannot deal with groups of companies without addressing


other complex procedural issues that frequently arise in this area, such as
consolidation,joinderandcross-claims,aswellasICCpracticeinrelationto
theseissues.

Itwasfinallydecidedtodevotethelastpartoftheseminartoenforcement
issueswhichareparticularlysensitiveinmultiparty,multicontractcases
andtoatopicthathasacquiredgreatimportanceintheoryandpracticein
theUnitedStates:classactionarbitrations.