Microsoft Word - Damodaran Pooja, Master Thesis

International Commercial Arbitration Law
Consolidation of arbitration without parties’ consent: a threat
to party autonomy?
By: Pooja Damodaran
Electronic copy available at: https://ssrn.com/abstract=3662152

Table of Contents
Table Of Abbreviations ..........................................................................................3
Abstract ..................................................................................................................4
I. A tale of a spider: introduction ....................................................................5
1.1. Aim and Purpose ........................................................................................6
1.2. Research inquiries and thesis structure ....................................................6
1.3. Methodology, thesis structure and legal sources.......................................7
1.4. Scope and Limitation ..................................................................................8
II. Intertangled spiderweb: consent & consolidation .......................................9
2.1. Consent Conundrum ................................................................................ 11
2.2. Efficiency dilemma ................................................................................... 13
2.3. Chapter Conclusion ................................................................................... 13
III. Spider spinning web: framework of compulsory consolidation ................. 14
3.1. Compulsory consolidation under arbitration institutions ..................... 14
3.2. Court ordered compulsory consolidation ................................................ 16
A) Express authorization of law ..................................................................... 16
B) Implied authorization and broad interpretation of law ........................... 18
IV. Untangled spiderweb: analysis on repercussions of compulsory

consolidation ........................................................................................................ 22
4.1. Consent-less consolidation and pitfalls .................................................... 23
4.2. Consequence of consent-less consolidation.............................................. 26
4.3. Chapter Conclusion .................................................................................. 28
V. Disentangled spiderweb: Compulsory consolidation- the way forward ..... 28
5.1. Solutions and recommendations to compulsory consolidation .............. 28
5.2. Fading of compulsory consolidation and new developments ................. 29
VI. Final Conclusion ....................................................................................... 32
Bibliography ........................................................................................................ 33

Table Of Abbreviations
cf Compare
Ed/eds Editor
Cert. Certiorari
Ed. Edition
Et al. And others
i.e Id est (that is)
p. Page Number
J. Journal
Fn Footnote
Rev. Review
v. Versus
Vol. Volume
Vols. Volumes
Intl. International
Arb Arbitration
E.g. Exemplum gratia (for example)
F.Supp Federal Supplement (District Court Reports)
HKIAC Hong Kong Administered Arbitration Rules
SIAC Singapore International Arbitration Centre
CIETAC China International Economic and Trade Arbitration
ICC International Chamber of Commerce Rules

Commission
SCC Stockholm Chamber of Commerce
LCIA London Court of International Arbitration Rules
FAA Federal Arbitration Act
& And
Ibid. In the same place
New York Convention Enforcement of Foreign Arbitral Awards

Abstract
In the era of global economic development, international commercial transactions are more
complex. Many disputes involving multiple parties and multiples contracts are witnessed in
international commercial arbitration today. More frequently, trades such as maritime transactions
and construction projects involve several inter-related parties and contracts. In order to solve the
complexities that arise in related disputes, consolidation of arbitration was introduced.
Consolidation is a procedural mechanism which unites several related disputes to avoid
inconsistency and multiplicity of proceedings.
However, certain jurisdictions and arbitral rules discussed in the thesis promote compulsory or
forcible consolidation. Compulsory consolidation is consolidation absent parties consent.
Compulsory consolidation is forcible in nature and in essence infringes certain basic principles of
international commercial arbitration. Thus, resulting in irreparable consequences such as
annulment of arbitral awards or refusal in enforcement. Therefore, compulsory consolidation aims
to improve efficiency at the cost of infringing party autonomy.
Key words: compulsory consolidation, role of consent, party autonomy, efficiency, international
commercial arbitration.

I. A tale of a spider: introduction
A spider spins its web until it earns a prey.1
In international trade today, there is a high possibility that the disputes do not always occur only
between the claimants and respondents. There are various commercial situations such as maritime
and construction projects which involve several parties to a dispute, which inversely gives effect
to complexities and multiplicity of contracts.2
These circumstances would give rise to multiple parallel arbitration proceedings from various
contracts. This will most likely lead to multiple contradiction and duplication of proceedings with
regard to expert opinions and witness hearings. Also, further result in increase of costs and several
decisions on the same dispute. One solution to this difficulty is to exercise the procedural
mechanism of consolidation.
The term ‘consolidation’ refers to the “act or process of uniting into one single case several
independent proceedings which are pending or initiated”.3 For example, A and B are parties to
one contract and A and C are parties to another contract. If there are common claims against A by
party B and C, they could request for consolidation.
Consolidating claims is highly beneficial in arbitral proceedings and the risk of inconsistency and
contradictory awards is a prevented in this process.4 Ideally, consolidation is performed only with
the consent of all the parties to the disputes. The reason being, arbitration is fundamentally based
on the principle of party autonomy, confidentiality and consent.5
Consolidation of arbitration is the apparent solution to difficulties that arise in related disputes.
However, the consolidation without parties consent runs counterproductive to consolidation of
arbitrations.6 Compulsory consolidation is the term used to signify consolidation without parties
consent.7
The most essential principle of arbitration, without which the sanctity of arbitration will fall apart
is party autonomy. This principle enables the process of arbitration to be flexible. Party autonomy
ensures the parties free will in arbitration proceeding. The parties to the arbitration agreement have
the right to choose the laws governing the arbitration and conduct of the arbitral proceedings.
Consent is the underlying concept behind the principle of party autonomy. The arbitration
1
The concept of compulsory consolidation is compared to the complicated nature of a spiderweb by the author
because compulsory consolidation is a complex solution to related multi-party and multi-contract disputes.
2
Schwartz, M.D., 1990. Multiparty Disputes and Consolidated Arbitrations: An Oxymoron or the Solution to a
Continuing Dilemma. Case W. Res. J. Int'l L., 22, p.341.
3
Pair, L.M., 2011. Consolidation in international commercial arbitration: the ICC and Swiss rules. Eleven
international publishing, p.14.
4
Chiu, J.C., 1990. Consolidation of Arbitral Proceedings and International Commercial Arbitration. Journal of
International Arbitration, 7(2), p.54.
5
Chi, M., 2008. The Fading of Compulsory Consolidation of Arbitration: A Fight between the Principles of
Efficiency and Party Autonomy in International Commercial Arbitration. Fudan Journal of the Humanities & Social
Science, p.2, https://www.researchgate.net/publication/228214375, (Last visited: 05/04/2020).
6
7
Ibid.

agreement is the basis of arbitration and a bulletproof evidence of party autonomy. Hence, the
parties’ consent is the most important priority in arbitration. Further, any action taken against the
will the parties of the parties will result in enforcement difficulties.8
Therefore, the intrusion of courts and arbitral institutions to order consolidation absent parties
consent could potentially result in various discomforts (explained in chapter 4). Thus, the thesis
sets to examine if consolidation without parties consent can be justified and if it is a threat to party
autonomy.
1.1. Aim and Purpose

The aim of the thesis is to analyse within the existing legal framework, if consolidation can be
ordered absent parties consent. Further, if compulsory consolidation is a threat to party autonomy.
Although compulsory consolidation is practiced only in a few jurisdictions and allowed in certain
arbitral rules, it is still a questionable practice within the realm of international commercial
arbitration.
There are various proposed solutions to difficulties that arise of multi-party and multi-contract
disputes. Some authors agree that the solution lies in the drafting of the contract meticulously
between the parties.9 Some suggest existing arbitral rules and national laws to provide for
provisions which enable consolidation.10
However, there are still legislations and arbitral rules that forcefully impose consolidation on the
parties. The intention behind compulsory consolidation could be efficiency but there lies an
eminent threat of party autonomy being infringed. The purpose of the thesis is to examine if party
autonomy can be violated to ensure efficiency in arbitration proceedings. Further, if there is any
workable solution to balance party autonomy and efficiency in consolidation of arbitrations.
1.2. Research inquiries and thesis structure

In order to comprehensively answer the main aim of the thesis, each chapter of the thesis is
dedicated to address a sub-question. The following are the enquires each chapter seeks to analyse:
• Chapter 2- Can consolidation exist without parties consent?
• Chapter 3 – What is the existing legal framework providing for compulsory consolidation
and its justification?
• Chapter 4- What are the pitfalls and consequence of consent-less consolidation?
• Chapter 5- Are there any solutions to consent-less consolidation? How to strike a better
balance between protection of party autonomy and efficiency while consolidating
arbitrations?
8
Fagbemi, S.A., 2015. The doctrine of party autonomy in international commercial arbitration: myth or
reality?. Journal of Sustainable Development Law and Policy (The), 6(1), p.228-229,
https://heinonline.org/HOL/LandingPage?handle=hein.journals/jsusdvlp6&div=14&id=&page, (Last visited:
01/06/2020).
9
Hardy, C., 2000. Multi-Party Arbitration: Exceptional Problems Need Exceptional Solutions. Arbitration: the
Journal of the Chartered Institute of Arbitrators, 66(1), p.15.
10
Ibid.

1.3. Methodology, thesis structure and legal sources
The following methods were chosen to elaborate the research inquiries with both theoretical and
practical explanations in order to answer the underlying research question of the thesis.
• Legal Doctrine
Legal research is a dynamic examination of issues relating to law within the scope of methodology
framework. 11The doctrinal legal research is defined as, “research which asks what the law is in a
particular area.”12 Modern doctrinal method also has elements of empirical method and is
normative.
According to Ian Dobinson and Francis Johns, “Doctrinal or theoretical legal research can be
defined in simple terms as research which asks what the law is in a particular area. It is concerned
with analysis of the legal doctrine and how it has been developed and applied. This type of research
is also known as pure theoretical research. It consists of either a simple research directed at
finding a specific statement of the law or a more complex and in depth analysis of legal
reasoning.”13
Traditionally, the doctrinal method comprises of de lege lata and de lege ferenda approaches.14
The de lege lata approach focuses on case laws and legislations. Whereas, the de lege ferenda is
used to offer solutions and recommendation for the legal enquires. The thesis applied both de lege
lata and de lege ferenda approach by analysing plethora of case laws, relevant legislations, arbitral
rules and suggesting changes to arbitration rules and national arbitration laws regarding
compulsory consolidation.
Moreover, firstly, the author explains under Chapter 2 the importance of consent in arbitration and
the interlink between consolidation and consent. Secondly, the thesis will begin examining the
legal framework of compulsory consolidation under national legislation and arbitral rules in
Chapter 3. Thirdly, in Chapter 4, the author analyses the problems that arise of compulsory
consolidation and enforcement difficulties with the help of United Nations Convention on the
Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). Finally, the
author concludes with possible solutions, recent changes and new developments such as Singapore
International Arbitration Centre’s proposal on cross institution consolidation to the problem of
compulsory consolidation in Chapter 5.
In addition, the thesis also include other sources such as journal articles and commentaries on case
laws and statutory legislations to the examination process.15 Furthermore, the doctrinal method is
used to describe how the law has developed over time in terms of judicial reasoning and legislative
11
Kharel, A., 2018. Doctrinal Legal Research. Available at SSRN 3130525, p.1.
12
McConville, M. ed., 2017. Research methods for law. Edinburgh University Press, p.21,
https://www.jstor.org/stable/10.3366/j.ctt1g0b16n.7, (Last visited: 14/05/2020).
13
Kharel, A., 2018. Doctrinal Legal Research. Available at SSRN 3130525, p.3.
14
Ibid.
15
Hutchinson, T., 2015. The doctrinal method: Incorporating interdisciplinary methods in reforming the
law. Erasmus L. Rev., 8, p.84.

enactments. The thesis extensively analyses how compulsory consolidation has evolved over time
under different statutory laws and arbitral rules explained below.
• Comparative elements and case law analysis

The author does not intent to make legal comparison. However, comparative elements were used
to list out different jurisdictions and arbitral rules which make compulsory consolidation possible.
Mainly three jurisdictions were analysed, i.e Netherlands, Hong Kong and United States, the
reason behind the same is elucidated under scope and limitation. In addition, reference to France,
Sweden and English jurisdictions were made to understand the importance of consolidation with
consent.
Further, the thesis also examines arbitral rules such as Hong Kong Administered Arbitration
(HKIAC) arbitration rules, the Singapore International Arbitration Centre (SIAC) and China
International Economic and Trade Arbitration Commission (CIETAC) which allow for
consolidation absent parties consent. The case law analysis which “identifies how certain legal
provisions or legal institutions are applied” 16 was also a used method in the thesis. Particularly,
to analyse cases emerging from the United States, where compulsory consolidation is
predominantly still in practice.
• Materials
A wide range of materials were used to carry out the analysis mentioned above. Research in
international commercial arbitration unlike domestic legal research requires a mixture of both
national and international sources.17 The primary sources such as case laws of national legislations,
procedural laws, arbitral awards, arbitral rules and secondary sources such as articles from
journals, commentaries and books on related questions were used in this thesis.
International sources such as New York Convention was referred to. Further, due to the lack of
publicly available arbitral awards, secondary sources were particularly relied upon more. Case law
precedents have no binding value outside of their own jurisdiction. However, they were used as
illustrative examples of how arbitration law is interpreted globally.18
1.4. Scope and Limitation

The scope of the thesis is to examine if consolidation absent consent of any or all parties infringes
the principle of party autonomy. The examination of consolidated arbitration in this thesis is
strictly restricted to circumstances, when the parties consent is not expressly mentioned yet
consolidation is permitted. The thesis wholly focuses only on the concept of compulsory
16
Case Law Analysis, Riigikohus Supreme Court of Estonia, https://www.riigikohus.ee/en/case-law-
analysis/methodology, (Last visited: 14/05/2020).
17
J Sanjeyvignesh, Types of Legal Research Needed for Law Reform, p.11
http://www.academia.edu/7146989/TYPES_OF_LEGAL_RESEARCH_NEEDED_FOR_L
AW_REFORM, (Last visited: 14/05/2020).
18
Ibid.

consolidation, the importance of consent in arbitration and examines case laws, national laws and
arbitral rules relating to this question.
Due to the limited word count of the thesis, the scope of the thesis is limited to examine only the
provision relating to compulsory consolidation in three leading arbitral rules and three jurisdictions
in which the underlying consequences will be tested. The choice of arbitral rules notably are
HKIAC, SIAC and CIETAC and jurisdictions notably, Netherlands, Hong Kong and United States
of America. The choice of these arbitral rules and jurisdictions is mainly because they allow for
consolidation without the consent of all parties. Further, the choice is also based on the criteria of
diversity and practical reliance in the realm of international commercial arbitration community.
II. Intertangled spiderweb: consent & consolidation

“A fundamental aspect of arbitration is that, it is consent-based.”19 Parties to the arbitration are
at free will to agree on any method and procedure of dispute resolution.20 The principle which
gives the parties the right to make independent choices is known as party autonomy. This principle
allows both legitimacy and sets boundaries in arbitration.21 It is clear that only those disputes
agreed by parties can be arbitrated. Consent to arbitration is the limitation or waiver of court’s
intervention.22
The principle of party autonomy is subject to limitations.23 Party autonomy is also obliged by the
mandatory laws of lex arbitri, both procedural and substantive. These mandatory laws varies from
one jurisdiction to another. 24
However, forcible consolidation absent parties consent is in contradiction to the objectives of the
principle of party autonomy. Normally, statutory legislations and arbitral rules do not have
provisions to consolidate without parties consent.25 The courts in various jurisdictions have played
a significant role in interpreting the laws, rules or intent of the parties.26 The courts have followed
consolidation stricto sensu and/or de facto consolidation approaches. The practice of these
approaches in certain jurisdictions will be discussed below.
19
Richard Garnett et al. 2000, A Practical Guide to International Commercial Arbitration, Dobbs Ferry, N.Y: Oceana
Publications, p.3.
20
Petsche, M., 2004. The growing autonomy of international commercial arbitration, p.16.
21
Byrnes, J.D. and Pollman, E., 2003. Arbitration, consent and contractual theory: the implications of EEOC v.
Waffle House. Harv. Negot. L. Rev., 8, p.289.
22
Wittich, S., 2006. Georgios Petrochilos, Procedural Law in International Arbitration. Austrian Review of
International and European Law, 11, p.331, note 4.11.
23
Blessing, M., 1997. Mandatory rules of law versus party autonomy in international arbitration. Journal of
International Arbitration, 14(4), p.23; Donovan, D. and Greenawalt, A., 2006. Mitsubishi after twenty years:
Mandatory rules before courts and international arbitrators. Pervasive Problems in International Arbitration, p.11.
24
Weigand, F.B. ed., 2009. Practitioner's handbook on international commercial arbitration, introduction 1.229, OUP
Oxford.
25
Nicklisch, F., 1994. Multi-party arbitration and dispute resolution in major industrial projects. Journal of
International Arbitration, 11(4), p.59; Strong, S.I., 2008. The Sounds of Silence: Are US Arbitrators Creating
Internationally Enforceable Awards When Ordering Class Arbitration in Cases of Contractual Silence or
Ambiguity. Mich. J. Int'l L., 30, p.1039.
26
Leboulanger, P.,1996. Multi-Contract Arbitration. Journal of International Arbitration, 13, p.51.

• Consolidation stricto sensu
Consolidation stricto sensu (strict sense) is an approach where the related arbitral claims are
brought together under a single forum.27 For instance, the United States adopts a broad
interpretation of law as a legal ground to justify compulsory consolidation. Some courts in United
States have initiated consolidation stricto sensu.28 The southern district court of New York and the
second circuit of appeal played a significant role in ordering non-consented consolidation.29 These
consolidations were based on the liberal interpretation of the FAA (Federal Arbitration Act) and
the Federal Rules of Civil procedure. However, in the recent times these decisions were over-ruled
holding consolidation of arbitral proceedings cannot be ordered absent parties consent either
expressly or impliedly.30 Further, the draft proposal of the restatement of the law31 is a proof that
forcible consolidation is slowly wearing off completely.
It is also pertinent to note jurisdictions such as France do not practice compulsory consolidation
absent parties interest. However, the French procedural law is applied in ad hoc arbitrations in
accordance with Article 1493 of the France Code of Civil Procedure. 32 Further, the Article 1493
grants power to the judges to consolidate ad hoc proceedings, if the issue involves common
question of law or fact which may affect the constitution of the arbitral tribunal.33
• De facto consolidation
De facto (in fact) consolidation is another method adopted by the national courts to deal with
issues of related arbitrations. De facto consolidation is an approach where related arbitral claims
are heard by the same arbitrators but separate awards are rendered.34 For instance, in Hong
Kong, the Shui On Case,35 (elaborated in the next chapter) the courts by the virtue of Section 6B
of the Hong Kong Arbitration Ordinance of 1982 ordered two arbitrations to be “heard together.”
The cases were heard by the same arbitrators at the same time. However, there were two separate
awards instead of one rendered to the parties. Further, Section 6B grants additional power to the
court to “order one arbitration to be heard immediately after another or to order that one or
more arbitrations be stayed until after the determination of one or more other arbitrations.” 36
27
Gómez, K.F., Gourgourinis, A. and Titi, C. eds., 2019. International Investment Law and the Law of Armed
Conflict. Springer, p.380.
28
29
Barron, W.M., 1987. Court-Ordered Consolidation of Arbitration Proceedings in the United States. J. Int'l Arb., 4,
p.81-86; Branson, D.J. and Wallace Jr, R.E., 1988. Court-Ordered Consolidated Arbitrations in the United States:
Recent Authority Assures Parties the Choice. J. Int'l Arb., 5, p.89-94.
30
Refer: Government of United Kingdom v. Boeing Co., 998 F.2d 68 (2d Cir. 1993); North River Ins. Co. v. Phila.
Reinsurance Corp., 63 F.3d 160 (2d Cir. 1995); Wallace Jr, R.E., 1993. Consolidated Arbitration in the United
States. J. Int'l Arb., 10, p.5-17; Oriental Commercial and Shipping v. ROSSEEL, NV, 609 F. Supp. 75 (S.D.N.Y.
1985); Builders Fed.(Hong Kong) Ltd. v. Turner Const., 655 F. Supp. 1400 (S.D.N.Y. 1987).
31
The American Law Institute, Restatement of the law, The U.S. Law of International Commercial and Investor-
State Arbitration, 24th April 2019.
32
Refer Article 1493 of French Civil Procedure Code, https://www.legifrance.gouv.fr/content/location/1745, (Last
visted: 19/05/2020).
33
Leboulanger, P., 1996. Multi-Contract Arbitration. Journal of International Arbitration, 13, p.52.
34
Gómez, K.F., Gourgourinis, A. and Titi, C. eds., 2019. International Investment Law and the Law of Armed
Conflict. Springer, p.380.
35
Miller, H.S., 1987. Consolidation in Hong Kong: the Shui On case. Arbitration International, 3(1), pp.87-90.
36
10

The above-mentioned jurisdictions have adopted stricto sensu and de facto approaches to order
consolidation of arbitrations. However, the underlying element missing in both these approaches
is explicit or implied consent of the parties. The pertinent question at this juncture is, can
consolidation exist without parties consent?
The author will answer this question by elaborating below on consent and its inter-tangled
relationship with consolidation. Further, serve a few instances where consolidation existed without
parties consent.
2.1. Consent Conundrum

Arbitration is regarded as a voluntary and consent based form of dispute resolution method. 37 The
courts by forcing non-consenting parties to agree to consolidation may result for the parties to
incur additional costs, rancour commercial relationships between the parties and end businesses.38
The main aim of arbitration is to amicably resolve disputes, while court-ordered consolidation
could result in contrary results.
Consolidation always raises questions about intersecting issues of party autonomy and consent.
Compulsory consolidation presumes parties consent.39 While there are many benefits of court-
ordered consolidation such as time and cost efficiency as well as systematisation of hearings, it is
also exposed to many challenges such as dilution of party autonomy, concerns regarding
confidentiality of arbitral proceedings, court’s substituting their opinions or decisions for the intent
of the parties to an arbitration.40
Consolidation ordered by the court with explicit ex ante consent or non-consent by the parties,
most certainly raises concerns regarding a court’s authority to compel consolidated proceedings.41
Generally, to permit consolidation the parties must have expressly chosen institutional rules or
terms allowing for such consolidation42 The refusal of parties intent to consolidate would likely
result in a prima facie breach of the contract.43 However, the assumption of certain courts which
consolidate absent parties consent is that there is a common question of law or fact that arises in
related arbitration matters.44 Thus, the courts in the absence of express statutory authority or parties
consent to consolidate, resort to contractual language, desire of the parties, or other relevant
37
O'connor, J.G., 1993. Maritime Arbitration Without Consent Vouching, Consolidation and Self-Execution: Will
the New York Practice Migrate to Canada. Journal of International Arbitration, 10(2), p.161,177.
38
Dore, I.I., 1990. Theory and Practice of Multiparty Commercial Arbitration with special reference to the
UNCITRAL Framework. Graham & Trotman, p.64.
39
Gerald Aksen, in a paper presented at the International Arbitration Symposium in Warsaw in 1980; cf. Thompson,
D., 1987. The Same Tribunal for Different Arbitrations. J. Int. Arb., 4, p.114.
40
Hascher, D.T., 1984. Consolidation of Arbitration by American Courts: Fostering or Hampering International
Commercial Arbitration. J. Int'l Arb., 1, p.127,134-137.
41
Guarin, M.F., 1993. International Approaches to Court-Ordered Consolidation of Arbitral Proceedings. The
American Review of International Arbitration, (4), p.4.
42
Veeder, V.V., 1986. Multi-party disputes: Consolidation under English law The Vimeira–a Sad Forensic
Fable. Arbitration International, 2(4), p.312.
43
Guarin, M.F., 1993. International Approaches to Court-Ordered Consolidation of Arbitral Proceedings. The
American Review of International Arbitration, (4), p.4.
44
Branson, D.J. and Wallace Jr, R.E., 1988. Court-Ordered Consolidated Arbitrations in the United States: Recent
Authority Assures Parties the Choice. J. Int'l Arb., 5, p.93.
11

circumstances. 45 The next chapter will elaborate the framework of compulsory consolidation,
however the following cases are referred in this chapter to explain the role of consent in
consolidation.
For instance, in the case of Children’s Hosp. v. American Arbitration Ass’n,46 the Superior Court
of Pennsylvania heard the dispute between four contractor parties and Children Hospital. These
parties entered into an agreement to construct a new hospital. Subsequently, dispute arose over
installing of safety measures amongst the parties. Following which, the hospital filed a petition for
consolidation of arbitration proceedings involving all contractors. The court ordered for
consolidation and reasoned that,
“in the absence of an express provision, the law will imply an agreement by the parties to
a contract to do and perform those things that according to reason and justice they should
do in order to carry out the purpose for which the contract was made and to refrain from
doing anything that would destroy or injure the other party's right to receive the fruits of
the contract. Accordingly, a promise to do an act necessary to carry out the contract must
be implied.”
Therefore, the court interpreted that the silence of the contractual provision and arbitration rules
on consolidation do not deprive the court of the power to consolidate arbitral proceedings when
the underlying intent of the parties was to resolve the disputes efficiently.
In another case, County of Sullivan v. Edward L. Bezelek, Inc,47 the New York Court of Appeals
heard the dispute between Sullivan County Community College who engaged Edward Durell
Stone for architectural services of the college building’s construction. Meanwhile, the County of
Sullivan (local sponsor of the college) engaged Edward L. Nezlek, Inc for construction of proposed
college buildings. Both contracts above-mentioned contained broad arbitration clauses.
Subsequently, dispute arose between the parties. A petition was made by Sullivan County
Community College to consolidate proceedings against Edward Durell Stone and Edward L.
Nezelek, Inc. Amongst other things, the court ordered for consolidation and reasoned that,
“We recognize the fundamental principle that the resolution of disputes by arbitration is
grounded in agreement of the parties. In that perspective, on principle it would have
seemed preferable to premise orders directing consolidation in arbitration on express
agreements of parties to that effect. That was not, however, the basis for the development
of the judicial power to consolidate. In recent times, given the decisions of our court and
others, parties signing an agreement to arbitrate must be held to do so in contemplation of
45
46
Children's Hospital v. American Arbitration Ass'n, 231 Pa. Super. 230 (Pa. Super. Ct. 1974).
47
County of Sullivan v. Edward L. Bezelek, Inc., 42 N.Y.2d 123, 128, 366 N.E.2d 72, 75, 397 N.Y.S. 2d
371, 374-175 (1977).
12

the announced authority of the courts in proper cases to direct consolidation. If it is now
desired to avoid the possibility of consolidation, appropriate provisions to preclude or limit
consolidation can be drafted for inclusion in the particular arbitration agreement.”48
Therefore, the Supreme Court of New York in the County of Sullivan case held that if the parties
intention was to exclude consolidation or the intervention of the court, they were obligated to
explicitly preclude the possibility of consolidation. Thus, consent plays a crucial role in
consolidation but, most often it is interpreted that the parties agree to any mechanism that improves
efficiency in arbitration proceedings, if not expressly agreed otherwise.
2.2. Efficiency dilemma

The principle of efficiency is yet another intrinsic feature of arbitration. One of the reasons for
consolidating arbitrations is that it improves efficiency in arbitration proceedings. The aim of any
arbitration proceeding is to settle disputes speedily, efficiently and amicably.49 Consolidation
rightly fits the bracket of efficiency. The mechanism of consolidation helps to combine two or
more related claims into one. Thereby increasing efficiency in arbitration proceedings.
Efficiency in international arbitration can be measured in terms of money and time.50 Compulsory
consolidation is cost and time efficient as it unties several claims into one. Further, it reduces the
risk of parallel or duplication of proceedings. For example, in an arbitration proceeding between
party A, B and C. A has a contract with both B and C. There are related claims in both the contracts.
The court orders for compulsory consolidation on the grounds of common question of law and
fact. Thus, under these circumstances compulsory consolidation is time and cost efficient. If not,
there will be two separate proceedings and two separate awards with related claims.
Therefore, the common defence used to order compulsory consolidation is that it promotes
efficiency. However, tailoring the arbitration process against the consent of the parties may defeat
the purpose of arbitration being a voluntarily and flexible method of dispute settlement. While
consolidation is beneficial when initiated with consent of the parties, it is detrimental when element
of consent is taken away. Hence, compulsory consolidation strives to strike a balance between the
principle party autonomy and efficiency, however the balance is most often never achieved in
practice.
2.3. Chapter Conclusion
The existence of consolidation without consent is highly questionable.51 The quintessential rule of
arbitration is that where the parties consent is given at most importance.52A number of national
48
Ibid.
49
Martin, T., 2018. J William Rowley QC, Doak Bishop and Gordon Kaiser (eds), The Guide to Energy Arbitrations,
p.253.
50
Heiskanen, V., 2015. Key to Efficiency in International Arbitration. ICSID Review-Foreign Investment Law
Journal, 30(3), p.481-485.
51
p.255.
52
Sunday A. Fagbem, p.226,
https://heinonline.org/HOL/LandingPage?handle=hein.journals/jsusdvlp6&div=14&id=&page, (Last visited:
01/06/2020).
13

courts have ordered for consolidation absent parties consent, however there is no certainty that
these awards were enforced.53 Consent and consolidation thus, is an intertwined concept.
Consolidation can exist without the consent of the parties if it improves efficiency in arbitration
proceedings. However, it may result in various pitfalls and consequences. Before addressing the
consequences, the next chapter of the thesis will examine the existing legal framework providing
for compulsory consolidation.
III. Spider spinning web: framework of compulsory consolidation

Generally, the parties provide for consolidation in their arbitration clauses if they foresee multi-
party or multi-contract disputes.54 In the absence of express provision with regard to consolidation
in the arbitration clauses, depending on the nature of arbitration, either the arbitral rules or statutory
laws chosen by the parties are considered. 55 If the arbitration rules or laws chosen by the parties
provide for consolidation, then at the request of the parties, the arbitral tribunal or the court may
order for consolidation, provided all requirements under the consolidation provision are met. 56
Consolidation is not relatively a new topic under both arbitral institutions and courts. 57 However,
certain jurisdictions and arbitral institutions have allowed consolidated arbitrations absent parties’
consent. This chapter focuses on the legal framework providing for compulsory consolidation. In
order to examine this inquiry, the following discussion will focus on the framework of compulsory
consolidation under 3.1. arbitration institutions and 3.2. court ordered compulsory
consolidations.
3.1. Compulsory consolidation under arbitration institutions

Arbitral institutions have recognised the issue of complexities arising out of multi-party and multi-
contracts disputes and are amending their rules to accommodate this issue. However, the element
of consent is a key requirement under the consolidation provision in other prominent institutional
rules.58 The following are three leading institution’s approach on consolidation without all parties
consent, which will be analysed.
The HKIAC, SIAC and CIETAC Arbitration Rules have diverse consolidation provisions which
permit consolidation of arbitrations amongst multiple parties under multiple contracts. In
particular, these rules allow for consolidation of arbitrations where:59
• The parties mutually allow for consolidation
53
Ibid.
54
Hoellering, M.F., 1997. Consolidated Arbitration: A useful tool in multiparty contract disputes, result in increased
efficiency or an affront to party autonomy?. Dispute Resolution Journal, 52, p.46.
55
Brekoulakis, S., 2008. The relevance of the interests of third parties in arbitration: Taking a closer look at the
elephant in the room. Penn St. L. Rev., 113, p. 1171 – 1172.
56
Park, W., Reisman, W.M., Craig, W.L. and Paulsson, J., 2015. International Commercial Arbitration: Cases,
Materials and Notes on the Resolution of International Business Disputes.
57
International Arbitration, 7(2), p.58-71.
58
For example: Art. 10 of International Chamber of Commerce Rules (ICC); Art.15 of Stockholm Chamber of
Commerce (SCC); Art 22.1(x) of London Court of International Arbitration Rules (LCIA).
59
p.247.
14

• All claims arise from the same arbitration agreement
• Arbitration agreements are compatible
• Common question of law or fact in all arbitrations
• The relief sought arise from similar or series of transactions
Further, it is noted that HKIAC, SIAC and CIETAC Rules only provide for the consolidation of
arbitrations pending under their rules.
Article 28 of HKIAC Rules provides for consolidation of arbitrations.60 Additionally, Article 32.2
titled waiver states that, “the parties waive any objection, on the basis of the use of any procedure
under Articles 27, 28, 29, 30 or 43 and any decision made in respect of such procedure, to the
validity and/or enforcement of any award made by the arbitral tribunal in the arbitration(s), in so
far as such waiver can validly be made.”61
Therefore, HIKAC Rules are silent on the consent of all parties being a pre-condition for
consolidation. Moreover, Article 32.2 denies the parties an opportunity to raise objections against
consolidation proceedings initiated by the tribunal. Therefore, parties consent to consolidation is
not mandatory under HKIAC rules.
Rule 862 of the SIAC Rules, 2016 provides a unique feature, where the parties have two options
to consolidate arbitrations. They can either file an application with the registrar to consolidate two
or more arbitrations pending under these Rules into a single arbitration, provided the criteria under
Rule 8.2 are met. Alternatively, they can file an application for consolidation with the tribunal after
its constitution. However, the condition of all parties consent to consolidate is not mandatory.63
The CIETAC revised their Rules in 2015. Article 1964 deals with consolidation of arbitrations. The
amended Rules explicitly ruled out, “with the agreement of all parties” from their provision.
Further, Article 4 of the Rules provides “where the parties have agreed to refer their disputes to
CIETAC for arbitration, they shall be deemed to have agreed to the arbitration in accordance with
these Rules”65 Therefore, it is evident when parties choose these set of rules, inevitably the rules
are incorporated into their underlying arbitration agreement unless agreed otherwise. Thus, all
parties consent to consolidate is not required.
The general difference in consolidation provisions between other prominent arbitral rules and
SIAC, HKIAC and CIETAC Rules is that the latter provides for consolidation under multiple
contracts between multiple parties. Under the multi-contract circumstances, not all parties are
60
Hong Kong International Arbitration Centre, Administered Arbitration Rules, 2018,
https://www.hkiac.org/arbitration/rules-practice-notes/administered-arbitration-rules/hkiac-administered-2018-1#28
(Last visited: 23/04/2020).
61
Ibid.
62
Refer: Singapore International Arbitration Centre (SIAC) arbitration rules,
http://www.arbiter.com.sg/pdf/rules/SIAC%20Arbitration%20Rules%20(2016).pdf, (Last visited: 23/02/2020).
63
Ibid, Rule 8.1.
64
China International Economic and Trade Arbitration Commission (CIETAC) arbitration rules,
http://www.cietac.org/index.php?m=Page&a=index&id=106&l=en, (Last visited: 23/02/2020).
65
Ibid, Article 4.2.
15

bound by the same arbitration clause and allow for consolidation. In the event of adopting these
rules, the parties might face consolidation despite not consenting to the same.66
In sum, while these rules have attempted to solve the puzzle of multiple contract and multi-party
consolidation, they have failed to consider the importance of consent of all parties to consolidate.
The lack of consent of parties to consolidate could potentially raise some legal concerns. This
thesis will elaborate in further chapters on consequences of consolidation without parties consent.
3.2. Court ordered compulsory consolidation

The power of the national courts to consolidate arbitral proceedings is derived from the national
legislations. As far as court practices are concerned, the mechanism is far different from arbitral
tribunals. Some courts have established the practice of enforcing awards made by compulsory
consolidation. The courts practice of enforcing awards made by compulsory consolidation is either
on its own initiative or upon the request of the parties.67 This raises the two-basic questions. First,
if compulsory consolidation is justified and second, to what extent is court intervention in arbitral
proceedings is justified.68
This chapter will discuss the legal grounds under the following statues which permit for
consolidation of arbitrations without parties’ consent and their justifications. This discussion will
be of two parts: A) express authorization and B) implied authorization and broad interpretation of
law as legal ground.
A) Express authorization of law

Where the law expressly allows consolidation with or without parties’ consent, the courts are
authorized to consolidate provided the statutory requirements are compiled with. For instance,
under the Netherlands Arbitration Act 1986,69 the power of courts to order consolidation is implied
into arbitration agreements.
According to Article 1046, “if arbitral proceedings have been commenced before an arbitral
tribunal in the Netherlands concerning a subject matter which is connected with the subject matter
of arbitral proceedings commenced before another arbitral tribunal in the Netherlands, any of the
parties may, unless the parties have agreed otherwise, request the President of the District Court
in Amsterdam to order a consolidation of the proceedings.”70
66
p.247.
67
68
Ibid.
69
Netherlands Arbitration Act, 1986, Article 1046,
https://www.jus.uio.no/lm/netherlands.arbitration.act.1986/toc.html (Last visited:03/04/ 2020).
70
Ibid; Art. 1046.1 of the Netherland Code of Civil Procedure, 1986.
16

Further, Article 1046.2 of The Netherlands Arbitration Act states,71 “The President may wholly or
partially grant or refuse the request, after he has given all parties and the arbitrators an
opportunity to be heard. His decision shall be communicated in writing to all parties and the
arbitral tribunals involved.”
Therefore, the court is empowered to order compulsory consolidation of arbitration provided: (1)
the disputes are inter-connected, (2) a request is summitted to the president, (3) the parties do not
have contrary agreements, and (4) the opportunity to be heard is given to the parties and the
arbitrators.
Thus, it is clear in the Netherlands, the consent of all parties is not a mandatory pre-condition for
consolidation of arbitration, the court has discretion in deciding consolidation of arbitration
proceedings.
Another example of compulsory consolidation is established in the Hong Kong Arbitration

Ordinance, 1997. Consolidation of arbitration is allowed under Schedule 2 of the Hong Kong
Arbitration Ordinance (Cap 609)72 governing consolidation of arbitrations. Among those
provisions, Section 6B permits national court to order compulsory consolidation provided, where
in relation to two or more arbitration proceedings it appears to the Court:
“(a) that some common question of law or fact arises in both or all of them, or (b) that the
rights to relief claimed therein are in respect of or arise out of the same transaction or
series of transactions, or (c) that for some other reason it is desirable to make an order
under this section, the Court may order those arbitration proceedings to be consolidated
on such terms as it thinks just.”73
The courts in Hong Kong, according to Section 6B, are empowered to order parallel arbitration
proceedings to be consolidated. Further, Section 6B authorises the courts to only look into the
factual elements such as applicable law, facts and reliefs claimed of different parallel arbitration
proceedings or any other valid reasons necessary for consolidation of claims.
Section 6B was amended in 2015 and the current provision of consolidation of arbitrations is under
Schedule 2, Section 2. The provision authorises consolidation of arbitration provided the above-
mentioned criteria is fulfilled. However, consent of all parties to the arbitration proceedings is still
not a mandatory requirement.74
71
Netherlands Arbitration Act, 1986, Article 1046.2,
https://www.jus.uio.no/lm/netherlands.arbitration.act.1986/toc.html (Last visited:03/04/ 2020).
72
Hong Kong Arbitration Ordinance 1997 (Cap 609), https://www.elegislation.gov.hk/hk/cap609 (Last visited
03/04/2020).
73
74
Hong Kong Arbitration Ordinance 2019 (Cap 609),
https://www.elegislation.gov.hk/hk/cap609?SEARCH_WITHIN_CAP_TXT=consolidation (Last visited:
17/05/2020).
17

Moreover, there are a few concerns attached to the practical application of this provision. The
Hong Kong Supreme Court in Shui On Construction Co. Ltd. v. Moon Yik Co. Ltd., et al.75, and
Schindler Lifts (Hong Kong) Ltd. v. Shui On Construction Co. Ltd.76 ordered two related arbitration
claims to be consolidated notwithstanding the objections of the parties.77
The Supreme Court of Hong Kong provided reasoning for consolidation without parties consent.
Firstly, it expressed that there were common questions of law and fact in both arbitrations claims.
Secondly, the court had statutory discretion vested under Section 6B of the Hong Kong Arbitration
Ordinance to consolidate. Finally, both arbitration proceedings were domestic and possessed
identical arbitration clauses.78 Thus, it remains silent, if parties consent regarding consolidation of
international arbitration proceedings is a necessary element for courts in Hong Kong.
Further, in the United States, compulsory consolidation is witnessed in both domestic and
international commercial disputes.79 In particular, the California Civil Procedure Code under
Section 1281.3, Article 6, 80 Section 602 of the New York Civil Practice laws & Rules81 and
Chapter 251, Section 2A of Massachusetts Uniform Arbitration Act82 allow for compulsory
consolidation which increases efficiency and effectiveness in arbitral proceedings.
B) Implied authorization and broad interpretation of law

• Consolidation regime in the United States
Until 1913, certain district courts in the United States adherently believed that they have the power
to order consolidation of claims in arbitration matters.83 The arbitration legislation which is the
FAA does not address the question of consolidation in both domestic or international cases. There
are certain federal courts which have broadly interpreted their power and expanded the scope of
laws to order consolidation of claims.84
The U.S. courts85 extended the policy in support of the FAA by broadly interpreting the FAA to
permit compulsory consolidation. In this process, the courts employ two main rationales. Firstly,
75
Shui on Construction Company Limited v. Moon Yik Company Ltd, et al, 1987 H.K.L.R. 1224, 1987 H.K.L.R.2
1224 (1987).
76
Schindler Lifts (Hong Kong) Ltd. v. Shui On Construction Co. Ltd., 29 B.L.R. 95 (1984).
77
Science, p.4, https://www.researchgate.net/publication/228214375, (Last visited: 05/04/2020)
78
Ibid; Veeder, V.V., 1987. Consolidation: More News from the Front-Line The Second Shui On Case. Arbitration
International, 3(3), p.263-264.
79
Compulsory consolidation in both domestic and international commercial disputes originated in New York, Vigo
Steamship Corp. v. Marship Corp. of Monrovia, 26 N.Y.2d 157, 257 N.E.2d 624, 309 N.Y.S.2d 165, cert. denied,
400 U.S. 819 (1970).
80
Refer, Section 1281.3 of California Civil Procedure Code,
https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=CCP&division=&title=9.&part=3.&chap
ter=2.&article (Last visited: 19/05/2020).
81
Refer, Article 6, Section 602 of the New York Civil Practice Laws & Rules,
https://www.nysenate.gov/legislation/laws/CVP/A6, (Last visited: 19/05/2020).
82
Refer, Chapter 251, Section 2A of the Massachusetts Uniform Arbitration Act for Commercial Disputes,
https://malegislature.gov/Laws/GeneralLaws/PartIII/TitleIV/Chapter251/Section2A, (Last visited: 19/05/2020).
83
84
Wallace Jr, R.E., 1993. Consolidated Arbitration in the United States. J. Int'l Arb., 10, p.6.
85
Compania Espanola de Pet., SA v. Nereus Ship., 527 F.2d 966 (2d Cir. 1975).
18

the Federal courts believe they possess the rights to order consolidation based on the justification
that they have the power to enforce arbitration agreements. This power includes the court’s
authority to apply the consolidation provisions of the Federal Rules of Civil Procedure in the
absence of explicit language in the FAA.86
The interpretation of the courts to apply consolidation is that Rule 81(a)(6)(B) of the Federal Rule
of Civil Procedure allows the court under Title 9 of the U.S. Code to refer to Rule 42 Federal Rule
of Civil Procedure. In the absence of express language to consolidate proceedings, the court may
order for consolidation as a matter of involving common question of law or fact in order to avoid
unnecessary costs or delay in arbitral proceedings.87
Secondly, the Federal courts have the obligation to enforce written arbitration agreements based
on the statutory rights. The power to enforce these agreements effectively includes the power to
order consolidation when necessary.88
However, when there is an express agreement not to consolidate disputes, the courts avoid
prejudice to the parties and inconsistent results. Thus, order for consolidation is only made where
common issues of fact and law are involved.89
• Evolution of compulsory consolidation in U.S. Courts

The United States courts’ established that they have the power to consolidate arbitrations, mainly
on the ground that there exist common issues provided no substantial right is prejudiced.90 The
development of compulsory consolidation arose from New York courts. The most widely
discussed case by the New York courts was the Vigo Steamship Corp v. Marship Corp of
Monrovia.91 The case was based on a charter party dispute, where a shipowner sued the sub-
charterer for the structural damage done to his ship.92 The shipowner was unsuccessful in
compelling the sub-charters to arbitration due to lack of privity, instead sought for an arbitration
with the charterer to recover for damages for the ship. In return, the charter demanded for an
arbitration with the sub-charters.
The charterer then petitioned the court to order consolidation. The New York court of appeals
ordered for consolidation and reasoned that it helps to "avoid the possibility of conflicting awards
as well as the additional time and expense of separate proceedings when: (1) common issues of
86
87
Born, G., 2001. International commercial arbitration: commentary and materials. Brill Nijhoff, p.653-700.
88
Thomas J. Stipanowich, Arbitration and the Multiparty Disputes: The Search for Workable Solutions, 72 Iowa L.
Rev. 473, 1987, p.491-492.
Science, p.3, https://www.researchgate.net/publication/228214375, (Last visited: 05/04/2020); Thompson, D., 1987.
The Same Tribunal for Different Arbitrations. J. Int. Arb., 4, p.112-113.
90
91
Vigo Steamship Corp. v. Marship Corp. of Monrovia, 6 N.Y.2d 157, 257 N.E.2d 624, 309 N.Y.S.2d 165 (1970);
Chariot Textiles Corp. v. Wan- nalancit Textile Co., 18 N.Y.2d 793, 221 N.E.2d 913, 275 N.Y.S.2d 382 (1966).
92
Ibid.
19

law and fact exist; and (2) no substantial right would be prejudiced.”93 Further, they addressed
the contention if the courts had the power to consolidate, the court concluded:
“Assuming the applicability of Federal law to the issue of consolidation, it is not at all
clear that the Federal courts would be powerless to or would refuse to order consolidation
were they faced with this factual situation. Indeed, the contention as to a lack of power to
do so lies in the face of the provisions of the Federal Rules of Civil Procedure. Rule 42
provides expressly for consolidation in situations involving common questions of law or
fact and the Federal Rules generally are made applicable to the Federal Arbitration Act
as to matters of procedure not covered by the latter Rule 81 and the Arbitration Act is silent
as to the question of consolidating arbitration proceedings. There is thus explicit authority
for such consolidation.”94
Another widely reported case was Compania Espanola de Petroleos, S.A. v. Nereus Shipping
S.A.,95 involving a multiparty dispute over a shipping matter. There were three parties involved: a
shipowner (Nereus), a charterer (Hidrocarburos y Derivados), and a guarantor (Compania
Espanola de Petroleos).96 The charter party and shipowner had an arbitration clause binding them.
Simultaneously, the shipowner, guarantor and charter party had an arbitration clause (addendum
number two) binding them, wherein the guarantor would perform the remaining contract,
indemnify losses and assume rights and obligation, if the charter defaults in payment.
Upon the default of the charterer, the shipowner notified the chatterer based on their agreement
and guarantor based on addendum number two for arbitration. The shipowner strategically wanted
separate proceedings, first with the guarantor to indemnify the damages of the charter.97 The
Second Circuit ruled that the courts have the power to order consolidation and adopted the
reasoning of Vigo’s case.98 Unlike the case in Vigo, all parties created privity and signed the
addendum number two in the present case. The arbitration agreement between the shipowner and
chatterer provided for appointment of three arbitrators. The parties had to choose one arbitrator
each, and the third arbitrator had to be appointed by the presiding arbitrators.
In order to resolve the confusion arising out of inconsistent arbitration clauses, the court ordered
that the consolidated proceedings to be heard by a five member panel, so that all parties are
involved in the selection of the arbitrators. The court sought to avoid any complexities arising out
of enforcing the arbitral award in accordance with New York Convention.99
93
94
Ibid.
95
96
97
Ibid, p.352.
98
Vigo Steamship Corp. v. Marship Corp. of Monrovia, 6 N.Y.2d 157, 257 N.E.2d 624, 309 N.Y.S.2d 165 (1970).
99
Refer, Article V, New York Convention: 1(d), http://www.newyorkconvention.org/english, (Last visited:
19/05/2020).
20

As per statistics, the Compania Case100 seemed to have set an example for compulsory
consolidation for the courts at least within the jurisdiction of the Second Circuit. Since then the
lower federal courts within the Second Circuit routinely ordered or reaffirmed the consolidation
of related cases without regard to parties consent.101 Further, since the decision of Compania,
first,102 third,103 fourth,104 and sixth105 circuits have found authority to legally order consolidation
and fifth, eighth, ninth and eleventh circuit refused to consolidate arbitrations compulsorily.106
Moreover, there were objections for compulsory consolidation by certain federal courts. For
instance, the ninth circuit court of appeals in Weyerhaeuser Co. v. Western Seas Shipping Co,107
held that, “under the FAA its authority was narrowly circumscribed and thus an order of
consolidation was precluded absent the express consent of all parties.”108 The reasoning of
Weyerhaeuser was also adopted in Ore & Chemical Corp. v. Stinnes Interoil, Inc.109 Further, the
Massachusetts statute allows for parties to preclude consolidation provisions by contractual
agreement. However, the Californian state courts deny the same.110
Thus, it is evident in the recent times that compulsory consolidation is reducing, especially in the
United States. On 24th 2019, the draft proposal of restatement of the U.S law on international
commercial and investor-state arbitration was submitted by the council to the members of the
American law institute for consideration at the Ninety-Sixth Annual Meeting. Under section 3.6111,
consolidation of international arbitral proceedings was inserted. The provision explicitly excludes
the power of the court to intervene in consolidation of arbitration, unless agreed otherwise by the
parties.

The process of consolidation is a one-time solution of resolving all related disputes in one single
proceeding which is desirable because it is cost-efficient and prevents inconsistent awards due to
parallel proceedings. However, the main concern of such compulsory consolidation is dilution of
party autonomy. The practice of institutional consolidation and court-ordered consolidation made
without parties consent can be severely disadvantageous. Some of the de-merits being intervention
of third parties, infringing confidentiality of arbitration proceedings, difficulties in constitution of
100
101
Wallace Jr, R.E., 1993. Consolidated Arbitration in the United States. J. Int'l Arb., 10, p.7.
102
Refer: New England Energy Inc. v. Keystone Shipping Co., 855 F.2d 1 1st Cir. (1988), cert. denied, 109 S. Ct.
1527 1989; also refer: Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 105 S. Ct. 1238, 84 L. Ed. 2d 158 (1985),
p.219, 221.
103
Refer: Gavlik Const. Co. v. HF Campbell Co., 526 F.2d 777 (3d Cir. 1975).
104
Refer: Maxum Foundations, Inc. v. Salus Corp., 817 F.2d 1086 (4th Cir. 1987).
105
Refer: Hoover Group Inc. v. Probala & Associates, 710 F. Supp. 677 (N.D. Ohio 1989).
106
107
Weyerhaeuser Co. v. Western Seas Shipping Co., 743 F.2d 635 (9th Cir. 1984).cert. denied, 469 U.S. 1061 1984.
108
109
Ore & Chemical Corp. v. Stinnes Interoil, Inc., 606 F. Supp. 1510 (S.D.N.Y. 1985).
110
Refer: Garden Grove Com. Ch v. Pittsburgh-des-monies,140 Cal. App. 3d 251, 191 Cal. Rptr. 15 (Ct. App. 1983);
Del E. Webb Const. v. Richardson Hosp. Authority, 823 F.2d 145 (5th Cir. 1987).
111
Section 3.6 of Restatement of the U.S. Law of International Commercial and Investor-State arbitration:
Consolidation of International Arbitral Proceedings: Unless agreed otherwise, courts decline to decide and instead
refer to the arbitral tribunal (or arbitral institution, as appropriate) the question whether multiple international
arbitral proceedings should be consolidated into a single proceeding.
21

arbitral tribunal, unjust apportionment of fees, depriving party of judicial access and enforcement
concerns. The following chapter will focus on the pitfalls and consequences of consolidation of
arbitrations without consent.
IV. Untangled spiderweb: analysis on repercussions of compulsory

consolidation
“Arbitration is a creature of contract.”112 The main advantage of arbitration is the underlying
nature of freedom in contractual agreement. The parties right to self-governance of arbitration
proceedings is guaranteed. The right to choose the substantive law and procedural law enhances
the element of free will and consent of the parties in arbitration.
However, compulsory consolidation without parties consent stands as a vital example which
violates the parties contractual rights.113 Further, when compulsory consolidation of arbitration is
imposed by courts, arbitral institutions or any legislative decree, the fundamental character of
consent in arbitration is undermined. 114
The objective of consolidation is to be time and cost efficient and avoid parallel proceedings and
115
inconsistent results arising of multiparty disputes. However, critics like Dominique Hascher
argue that:
“Consolidated proceedings are more time-consuming and more costly than unconsolidated
proceedings, since additional parties and arbitrators are involved. Matters are enormously
complicated by the incorporation of separate disputes in a single arbitration proceeding.
Each party assumes the additional burden of hearing claims, giving evidence and
discussing testimonies with all the other parties involved. There is a higher probability of
delays. Risks of omission and error are multiplied. Additional time is needed for all
arbitrators to acquire acknowledge of the contentions and claims of all parties, and to
reach a decision on the merits of the dispute.”116
In addition, there are contentions that the identity of the disputes between parties remain
undisturbed. Further, arbitrators are not authorised to hear disputes between parties who are not
in privity.117 Consolidation is a shielding mechanism to prevent duplication of proceedings.
However, consolidation without the consent of parties alters the fundamental provision of the
arbitration agreement between parties. Enlisted below are pitfalls and consequences that arise of
112
113
114
Ibid.
115
Stipanowich, T.J., 1986. Arbitration and the Multiparty Dispute: The Search for Workable Solutions. Iowa L.
Rev., 72, p.473.
116
Hascher, D.T.,1984. Consolidation of Arbitration by American Courts: Fostering or Hampering International
Commercial Arbitration. J. Int'l Arb., 1, p.136.
117
Wittich, S., 2006. Georgios Petrochilos, Procedural Law in International Arbitration. Austrian Review of
International and European Law, 11, p.506.
22

4.1. Consent-less consolidation and pitfalls
The following are a few prominent pitfalls of consolidation without parties consent.
• Violation of contractual freedom

Hascher defines compulsory consolidation of arbitration as “not the intent of the parties, but the
judges.”118 The real threat in consolidation without parties consent is the violation of the basic
principle and feature of arbitration, i.e. party autonomy.
The previous chapter illustrated different approaches of consolidation and the rationale behind
consent in consolidation. Also noted that, when the arbitral rules, legislative decree and or court
imposes consolidation, the element of parties consent is not valued. This derogates the principle
of freedom of contract in modern arbitration law119 and results in rewriting of the arbitration
clauses.120
Ideally, the arbitration clauses contain agreements on choice of procedural law (lex arbitri.),
substantive law, procedural rules and method of appointment of arbitrators. In the event of
compulsory consolidation, possibilities to frustrate one or more subjects of the arbitration clause
exists. Such as, the choice of procedural and substantive law, selection of arbitrators and method
of appointment of arbitrations.121
For example, when the court or arbitral tribunal forcefully orders for consolidation without parties
consent, the arbitration clause is amended to accommodate the process of compulsory
consolidation i.e. appointment of arbitrators, method of appointment and other procedural
concerns is amended. This clearly is a threat to party autonomy as it could potentially be a judicial
or institutional modification of the parties arbitration agreement.
• Violation of privity and confidentiality

Traditionally, arbitration is a dispute resolution method which guarantees privity and
confidentiality in proceedings.122 The arbitral tribunal by the virtue of principle Kompetenz-
Kompetenz retains to decide on its own jurisdiction.123 The arbitral tribunal further, entertains
challenges to its jurisdiction, which includes its decision to consolidate. When consolidation of
arbitration is between parties which have no arbitration agreement binding them, it not only
violates privity but also judicial access.
118
Hascher, D.T.,1984. Consolidation of Arbitration by American Courts: Fostering or Hampering International
Commercial Arbitration. J. Int'l Arb., 1, p.133-134.
119
Thomas, J.S., 1987. Arbitration and the Multiparty Dispute: The Search for Workable Solutions, 72 Iowa L,
p.496.
120
121
Ibid.
122
Collins, M., 1995. Privacy and confidentiality in arbitration proceedings. Tex. Int'l LJ, 30, p. 321–336.
123
Eunice Chan Swee En, Drew & Napier., 2018, Consolidation of arbitral proceedings and its ramifications on a
party’s right to challenge the jurisdiction of the arbitral award, Kluwer Arbitration Blog,
http://arbitrationblog.kluwerarbitration.com/2018/03/21/consolidation-arbitral-proceedings-ramifications-partys-
right-challenge-jurisdiction-tribunal-arbitral-award/#comments (Last visited: 29/04/2020).
23

For instance, in a consolidation proceeding between party A, B and C, party B may file a claim
against C (where B and C do not have an arbitration agreement). In this situation, C is deprived of
its right to initiate legal proceedings against B.124
Compulsory consolidation allows third parties intervention in arbitration proceedings which was
initially concluded only between two parties. Therefore, these circumstance deprive parties judicial
access and fairness of the arbitration proceedings.125 Furthermore, under certain institutional
proceedings,126 the parties’ rights are ramified to challenge such consolidation at the national court
of the seat.127
The confidential feature of arbitration is often why parties choose arbitration as the dispute
resolution method.128 When the court or arbitral tribunal impose compulsory consolidation
deviating from the contract between the parties, the confidential character of arbitration is
damaged. The parties who are not bound by arbitration agreement are likely to be exposed to
confidential information of other parties in the consolidated arbitration. This could infringe the
principle of confidentiality and private nature of arbitration.129
Trade secrets and other sensitive information shared between parties to a dispute might be exposed
to a party not bound by their arbitration agreement. For example, in a dispute between a software
company and a marketing agency, information regarding their financial data, profit margin,
strategies and other confidential information could be shared with another party which is brought
into the consolidation proceedings.130
Thus, it is certain that in multi-party disputes, consolidating proceedings is efficient and avoids
similar concurrent proceedings. However, the intervention of a third party absent parties consent
infringes the rule of confidentiality and privity.131
• Violation of parties procedural rights

The arbitral tribunal is granted with the discretion to conduct proceedings in accordance with the
parties agreement and in a manner it deems fit, provided the principles of due process and equality
124
125
Emmanuel Gaillard “agreed that equality was the goal, including equality in the structuring of the arbitration.”
Committee on International Commercial Arbitration, Working session of 19/08/94, having Maître Jean Lisbonne as
Chairman, in Report of the Sixty-Sixth Conference of the International Law Association, Buenos Aires Conference
1994, The International Law Association, London, 1994, p. 713.
126
For instance, refer: Article 10 of ICC Rules; Article 28.1 of HKIAC Rules; Article 15 of SCC Rules; Article 8.4
of SIAC Rules; Article 28.8 of HKIAC Rules.
127
Refer: Karaha Bodas Co LLC v. Perusahaan Pertambangan Minyak dan Gas Bumi Negara (Pertamina) (No. 2),
2003 H.K.C.4 488 (2003).
128
Smeureanu, I.M., 2011. Confidentiality in international commercial arbitration (Vol. 22). Kluwer Law
International BV, p.16.
129
130
Ibid.
131
24

are maintained.132 This power vested with the arbitral tribunals naturally allows for them to
consolidate when agreed by the parties.
However, the intervention of the courts demeans the power of the arbitrator and results in diversion
of ultimate justice between the parties.133 Additionally, certain institutional rules and statutory
provisions134 provide for compulsory consolidation which creates confusion regarding the
constitution of the arbitral tribunal.
Many arbitration clauses generically provide with the quorum and method of the constitution of
the arbitral tribunal. These clauses provide the right to each party to appoint an arbitrator.
Compulsory consolidation arises difficulties in determining the appointment and constitution of
arbitral tribunal. The parties procedural rights are infringed. When consolidation is imposed on
parties, the parties original agreement on the constitution of arbitral tribunal in effect will be
subject to alteration.
For example, the Federal court in Compania case135 ordered for a single panel of five arbitrators
in a consolidation proceeding, altering the parties arbitration agreement which provided for a panel
of three arbitrators. Therefore, a lack of consent and unclear contractual language not addressing
this difficulty may further result in enforcement concerns.136
• Practical concerns and unjust apportionment of fees

The two main practical concern when consolidation is ordered absent parties consent are logistic
problems and additional costs. For instance, two parties decide on a three-arbitrator panel to
adjudicate their disputes. This scenario is subject to change, when compulsory consolidation is
imposed.
When more parties join the consolidation proceedings, there lies a high probability that the
arbitration clauses will be amended or altered to incorporate the right of each party to appoint an
arbitrator. This would result in practical concerns. The increase in number of arbitrators could
create complications with regard to scheduling of the proceedings, additional cost to the parties
and effectiveness of the arbitrators.137
Another aspect of logistic concerns is unjust apportionment of fees. For example, A and B are
parties to a proceeding and A and C are parties to another proceeding. A requests for consolidation
132
133
Ibid; Also, refer: La. Stadium & Exposition Dist. v. Huber, Hunt & Nichols, Inc., 349 So. 2d 491 (La. Ct. App.
1977); Government of United Kingdom v. Boeing Co., 998 F.2d 68 (2d Cir. 1993).
134
Refer chapter 3: HKIAC, SIAC and CIETAC Rules, The Netherlands Code of Civil Procedure, Hong Kong
Arbitration Ordinance and Federal Civil Procedure.
135
136
137
Ibid.
25

between A, B and C. When such consolidation is put to effect, it might result in unjust
apportionment of fees to B and C, whereas, it could be cost-effective to A. There is a probability
that B and C may be required to pay more than they would have in a separate proceedings with A.
Therefore, consolidation without consent could inversely affect the overall cost of the proceedings
and is less beneficial to some parties.138
4.2. Consequence of consent-less consolidation

Compulsory consolidation may cause the above-mentioned pitfalls and this would results in
difficulties of enforcing such awards.
“The success of international arbitration is largely dependent on the enforceability of the resulting
award.”139 The recognition and enforcement of an arbitral award is the main driving force for the
parties to choose arbitration as the dispute resolution method.140 The result of compulsory
consolidation creates uncertainty with regard to the enforcement of arbitral awards. Challenges
take place at the seat of arbitration and the country of enforcement.141 The New York Convention
binds over 160 nations and is the applicable law concerning recognition and enforcement of
foreign arbitral award.142
Two provisions under the New York Convention may act as a barrier for the recognition and
enforcement of arbitral awards resulting from consolidation absent parties consent. Firstly, Article
V(1)(d) of the New York Convention143 will not favour consolidation absent parties consent. The
Article V(1)(d) is unambiguous and definitive.144 When the composition of the arbitral tribunal is
neither in accordance with the parties’ arbitration agreement nor with parties consent, a state may
refuse to enforce such awards. Further, the selection clause provided in the arbitration agreement
is altered due to the intervention of the courts or arbitral tribunals ordering for compulsory
consolidation.
The defence often taken by the courts or institutions imposing compulsory consolidation is, “when
the parties agree to arbitrate in a given jurisdiction, the agreement implies that they also agree on
the applicability of the arbitration law of that jurisdiction. If the arbitration law includes the
possibility of judicially ordered consolidation of related arbitrations, that possibility forms part of
138
139
140
Ibid.
141
Pair, L.M., 2011. Consolidation in international commercial arbitration: the ICC and Swiss rules. Eleven
international publishing, p.220.
142
The New York Convention on the Recognition and Enforcement of Foreign Arbitral Award, New York, 10 June
1958, http://www.newyorkconvention.org/in+brief, (Last visited: 09/05/2020).
143
Article V(1)(d) of the New York Convention: The composition of the arbitral authority or the arbitral procedure
was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the
law of the country where the arbitration took place.
144
26

their agreement.”145 Thus, eliminating Article V(1)(d) as a ground to challenge the arbitral
award.146
However, the above-mentioned defence stands against the principle of party autonomy. It
obfuscates the rights of the parties to appoint or constitute the arbitral tribunal in accordance with
their agreement. The superior influence of the courts or institution in composition of the panel,
would result in improper constitution of the arbitral tribunal.147 The principle of equality also needs
to be given due importance. When compulsory consolidation is issued based on one party’s
request, there is a probability that this party could preponderantly influence one or more parties
over the composition of the panel.148
Therefore, among other things, Article V(1)(d) of the New York Convention protects parties rights
over the composition of the arbitral tribunal. The principle of party autonomy is not subject to
limitation in arbitrator selection and compulsory consolidation could be a threat to this principle.
Secondly, Article V(2)(b) of the New York Convention stands as an obstacle in enforcing
consolidated awards without parties consent.149 The provision provides that if an arbitral award is
against public policy of the enforcing country, the state may refuse to give effect to such awards.
In the case of consolidation without parties’ consent either by the courts or the arbitral tribunal, it
infringes the contractual rights of the parties. This infringement would be a considerable ground
to deny enforcement under Article V(2)(b) of the New York Convention on the basis that public
policy of the enforcing state is to “give effect to freedom of contract”150 between the parties.
Additionally, public policy is defined as safety valve of domestic courts.151 The enforcing state
may not recognise compulsory consolidation and would be contrary to the policy of the country.
Moreover, procedural public policy of a country focuses on proper constitution of arbitral panel,
independence and impartiality of the arbitrator, arbitral mandates and principles such as due
process and equality.152 Compulsory consolidation increases the risk of these requirements not
being fulfilled and thus, potentially being challenged under Article V(2)(b) of the New York
Convention.
145
van den Berg, A.J., 1986. Consolidated Arbitrations and the 1958 New York Arbitration Convention. Arbitration
International, 2(4), p.368.
146
Ibid.
147
Pair, L.M. and Frankenstein, P., 2011. The New ICC Rule on Consolidation: Progress or Change. Emory Int'l L.
Rev., 25, p.1061, https://law.emory.edu/eilr/content/volume-25/issue-3/recent-development/icc-rule-consolidation-
progress-change.html (Last visited: 09/05/2020).
148
Ibid. Also refer, Karaha Bodas Co LLC v. Perusahaan Pertambangan Minyak dan Gas Bumi Negara
(Pertamina)(No. 2), 2003 H.K.C.4 488 (2003); Siemens AG and BKMI Industries Lagu GmbH v. Dutco
Construction Co. Ltd, 1994 A.D.R.L.J. 36 (1994).
149
Article V(2)(b) of the New York Convention: Recognition and enforcement of an arbitral award may also be
refused if the competent authority in the country where recognition and enforcement is sought finds that:
(b)The recognition or enforcement of the award would be contrary to the public policy of that country.
150
151
Pair, L.M. and Frankenstein, P., 2011. The New ICC Rule on Consolidation: Progress or Change. Emory Int'l L.
Rev., 25, p.1061, https://law.emory.edu/eilr/content/volume-25/issue-3/recent-development/icc-rule-consolidation-
progress-change.html (Last visited: 09/05/2020).
152
Ibid.
27

“The shortcomings of consolidation where enforcement is sought abroad increase the risk of
additional litigation, run counter to the goals of easing and smoothing the enforcement and
recognition process of arbitral awards which inspire the New York Convention, and, in the long
run, break down confidence in international commercial arbitration.”153
Therefore, consolidation without consent runs the risk of awards not being enforced on the basis
that it could be deemed to infringes public policy and party autonomy.

The purpose of arbitration is final, binding and enforceable award. The benefits of consolidation
are apparent. However, the consolidation of arbitrations without consent could result in the above-
mentioned consequences. In particular, the aspect of consolidation without consent is effectively
rewriting of arbitration clauses.154 This largely affects the principle of party autonomy and allows
improper interference of national courts in arbitration proceedings.155 Therefore, consolidation of
arbitration without parties consent is likely to infringe the principle of party autonomy. The final
chapter will focus on the solutions and new developments to resolve the difficulties that arise of
V. Disentangled spiderweb: Compulsory consolidation- the way

forward
Even though consolidation is desirable in multi-party disputes, the above-mentioned consequences
raises doubts if this procedural mechanism is effective to resolve related disputes absent parties’
consent.
5.1. Solutions and recommendations to compulsory consolidation

The following are effective solutions that could be considered while consolidating disputes to
strive a better balance between party autonomy and efficiency.
• Effective arbitration clauses: The object of arbitration is to achieve fair, just, less time
consuming and cost efficient dispute resolution.156 The arbitration agreement is fundamental
to initiate arbitration. The cardinal principle of drafting an arbitration agreement is to remove
all uncertainties and ambiguities that may arise during the settlement of the dispute.157
The primary object of the an arbitration clause is to ensure that neither parties escape
arbitration. If the arbitration clause is not drafted enclosing all the possibilities relating to the
153
Hascher, D.T., 1984. Consolidation of Arbitration by American Courts: Fostering or Hampering International
Commercial Arbitration. J. Int'l Arb., 1, p.127.
154
Science, p.11, https://www.researchgate.net/publication/228214375,(Last visited: 05/04/2020).
155
Ibid.
156
Eugene J. Heady, Smith, Currie & Hancock LLP, Strategies for drafting an effective arbitration clause,
https://www.smithcurrie.com/wp-content/uploads/assets/htmldocuments/EJH-
Strategies%20for%20Drafting%20an%20Effective%20Arbitration%20Clause.pdf, (Last visited: 01/06/2020).
157
van den Berg, A.J. ed., 1999. Improving the Efficiency of Arbitration Agreements and Awards: 40 Years of
Application of the New York Convention (Vol. 9). Kluwer Law International, p.48.
28

parties and the disputes, there is a high probability that the proceedings will be protracted and
frustrated.158 In order to bridge the gap, effective arbitration agreements must be drafted with
precision and details. For example, when the parties can foresee multi-party disputes or related
transactions that may arise in their commercial relationships (for example: construction or
maritime projects), they could prudently draft the arbitration clause with a clear intention to
allow for consolidation. This allows to mitigate risks while enforcing the award.
Further, the parties to multi-contract and multi-party transactions must ensure that all the
contracts contain compatible arbitration clauses. In particular, the parties should ensure that
the arbitration clauses provide for similar arbitral rules, number of arbitrators, language and
the same lex arbitri.159
• Constructive consolidation clauses: The parties should eliminate the risk of the arbitral
tribunal not having the jurisdiction over multi-party disputes. In order to achieve that, the
parties must make tailor made adaptations, which expressly mention that the arbitral tribunal
can assert jurisdiction when claims are consolidated. Further, they could agree on a single
arbitral tribunal to hear the consolidated claims. In addition, the parties could adopt an uniform
procedure for consolidation.
For instance, first, the procedure can include the place of consolidation- a tribunal, a court or
appointed arbitrators to determine the questions of consolidation. Second, the method or
criteria160 for the appointment of arbitrators in consolidated arbitrations should be decided by
the parties prior to the proceedings. Third, the apportionment of fees, legal and other costs to
be discussed by the parties before the consolidation of the arbitration. Finally, in case of
limitation periods agreed by the parties or by law could commence from the date in which
arbitrations are consolidated.161
• Suggestions to arbitral rules and statutory provisions: The arbitral tribunals and courts
could eliminate the practice of compulsory consolidation. Further, the arbitral rules and
statutory provisions could provide for a mechanism that explicitly helps parties to opt-in the
consolidation protocol. Additionally, the consolidation protocol can contain the criteria for
appointment of arbitrators for consolidation. In the absence of such explicit consent of the
parties, the court and tribunal may order consolidation if it deems fit.
5.2. Fading of compulsory consolidation and new developments

There have been significant developments to reduce the complexities that arise out of compulsory
consolidation.
158
Ibid.
159
Martin, T., 2018. J William Rowley QC, Doak Bishop and Gordon Kaiser (eds), The Guide to Energy
Arbitrations, p.255.
160
For instance: Judge Bola Ajibola, on appointment of arbitrator in consolidated arbitration,Les recours contre
l'arbitre pendant la procédure arbitrale, The ICC International Court of Arbitration Bulletin—Le statut de l'arbitre,
December 1995, p.116.
161
Ibid.
29

The laws allowing for compulsory consolidation from the perspective of various jurisdictions are
merely becoming an exception to the majority of international arbitration community that does not
recognise compulsory consolidation of arbitration.162 In Europe, most legislations do not allow for
compulsory consolidation except for the Netherlands.163 France and Sweden are often recalled as
prime arbitration destinations of the world. They for a fact, do not support compulsory
consolidation.164
Further, in England, the proposals for compulsory consolidation were rejected on two main
reasons. It would frustrate parties intention and pose a high risk of the award being annulled or
denied its recognition and enforcement denied in a state that does not permit compulsory
consolidation.165
Recently, the Law Reform Commission’s Report on the UNCITRAL Model Law suggested Hong
Kong to exclude provisions regarding compulsory consolidation. Therefore, in Hong Kong
compulsory consolidation maybe limited only to domestic arbitration and further limits courts
intervention to arbitration proceedings.166
Moreover, in the United States, the practice of compulsory consolidation is fading significantly.
The Supreme Court of the United States has clarified that the FAA does not mandate the court to
order compulsory consolidation, rather mandates to enforce arbitration agreements.167 Also, there
are proactive measure taken in recent time to curb the practice of compulsory consolidation in
United States which was explained in Chapter 3.
Further, the new developments to consolidation such as the Singapore International Arbitration
Centre (SIAC) proposal on cross institution consolidation168 aims to provide solution for
multiplicity of decisions in related matters.
The SIAC’S proposal brings forth radical solutions to situations in which several parties and
several disputes are involved. Firstly, this issue is tackled by adopting the cross institutional
consolidation provision in the institutional rules which rules out the inconsistent arbitration clauses
and consolidate claims. Secondly, cross-institution consolidation of arbitrations would be the road
162
Craig, W.L., 1995. Some trends and developments in the laws and practice of international commercial
arbitration. Tex. Int'l LJ, 30, p.8.
163
Veeder, V.V., 1987. Consolidation: More News from the Front-Line The Second Shui On Case. Arbitration
International, 3(3), p.264.
164
165
Department Advisory Committee on Arbitration Law (the DAC) Report on the Arbitration Bill, Chapter 2, Clause
35,1996, para 179-189, p.24; van den Berg, A.J., 1986. Consolidated Arbitrations and the 1958 New York
Arbitration Convention. Arbitration International, 2(4), p.367.
166
167
Glencore, Ltd. v. Schnitzer Steel Products Co., 189 F.3d 264 (2d Cir. 1999).
168
SIAC, Memorandum Regarding Proposal on Cross institution Consolidation Protocol: http://
www.siac.org.sg/images/stories/press_release/2017/Memorandum%20on%20Cross-Insti tutional%20
Consolidation%20(with%20%20annexes).pdf (Last visited: 21/02/2020).
30

ahead to reduce complexity and result in cost consuming and time saving arbitral proceedings.
Finally, solving inter-related disputes will improve the overall quality of decision making.
Further, the proposal provides for standalone mechanism for cross institution consolidation. The
proposal suggest two alternatives to the governing rules. First alternative is to form a joint
committee appointed from the members of the courts or boards of the concerned arbitral
institutions to decide the application. The second alternative is that one institution shall decide the
application and criteria for consolidation.
The proposal also suggest just one institution’s rule to apply if the joint committee could not be
formed. Institutional threshold for consolidation is however suggested as a mandatory requirement.
There were also solutions suggested under the objective criteria, to consolidate based on number
of cases, aggregate value of the disputes, time commencement of arbitration, subject matter of
dispute and nationality and domicile of parties.
The effective implementation of this proposal requires uniform set of rules and threshold to be
adopted by institutions in order to ensure transparency. Party autonomy is given importance under
the proposal, however the parties will not be able to opt-out this mechanism, if they have expressly
selected institutional rules which contain provisions for consolidation.
Therefore, the proposal focuses to eliminate borders between arbitral institutions and consolidate
related disputes. Thus, implementing such proposals could reduce the complexities that arise of
In essence, compulsory consolidation is a complicated means of justice, where most often party
autonomy is the victim. However, compulsory consolidation is predominantly not practiced in the
recent times. The statistics provide that compulsory consolidation practice is fading off.169
Therefore, it is noted that most jurisdictions value consent of the parties to be the epicentre of
arbitration proceedings. This is further proof that compulsory consolidation might be eradicated
completely in the near future.

The purpose of consolidation to improve efficiency in arbitration can be maintained, if proceedings
are not consolidated absent parties consent. The recent changes and amendments in certain arbitral
rules and legislations170 highlights the possibility for consolidation without infringing the principle
of party autonomy.
169
170
Ibid.
31

VI. Final Conclusion
The role of consent is crucial in any arbitration process. This thesis sought to analyse if
consolidation without parties consent would be a threat to party autonomy. The short answer of
the finding is, ‘yes.’
The thesis concludes that the parties arbitration agreements are altered or sculpted to favour the
theory of efficiency over the theory of party autonomy in cases concerning compulsory
consolidation.171 The courts and the arbitral tribunals most often interpret the intention of the
parties or their contractual language when there is no express agreement on consolidation. This
interpretation absent parties’ consent to consolidate invariably results in rewriting the arbitration
agreement.172
The defence in favour of compulsory consolidation is that the principle of party autonomy stresses
on efficiency of arbitration proceedings. Hence, consent could be presumed because the parties
opt arbitration for speedy and efficient redressal.173 However, this defence would fail on the basis
that arbitration is private law in nature and party autonomy prevails over efficiency.174
In order to detangle this difficulty in compulsory consolidation, the simple solution could be for
the arbitral institutions and courts to, firstly, include provisions that require consent of parties to
consolidate arbitrations. Secondly, consolidate only related matters where common issues of law
of fact exist.175 Thirdly, to include provisions explaining criteria’s or methods for appointment of
arbitrators before consolidation. Finally, for the sake of legal certainty provide the parties with a
choice to either expressly opt-in or opt-out the procedural mechanism of consolidation in their
arbitration agreement.176
171
172
Ibid.
173
Science, p.11 https://www.researchgate.net/publication/228214375, (Last visited: 05/04/2020).
174
Ibid.
175
Hoellering, M.F., 1997. Consolidated Arbitration: A useful tool in multiparty contract disputes, result in increased
efficiency or an affront to party autonomy?. Dispute Resolution Journal, 52, p.49.
176
Tong Chun Fai, E. and Dewan, N., 2009. Drafting arbitration agreements with ‘consolidation’ in mind?. Asian
international arbitration journal, 5(1), p.93-94.
32

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18. Government of United Kingdom v. Boeing Co., 998 F.2d 68
(2d Cir. 1993)
19. Vigo Steamship Corp. v. Marship Corp. of Monrovia, 26
N.Y.2d 157, 257 N.E.2d 624, 309 N.Y.S.2d 165, cert.
denied, 400 U.S. 819 (1970)
20. Shui on Construction Company Limited v. Moon Yik
Company Ltd, et al, 1987 H.K.L.R. 1224, 1987 H.K.L.R.2
1224 (1987)
21. Schindler Lifts (Hong Kong) Ltd. v. Shui On Construction
Co. Ltd., 29 B.L.R. 95 (1984)
22. North River Ins. Co. v. Phila. Reinsurance Corp., 63 F.3d
160 (2d Cir. 1995);
23. Oriental Commercial and Shipping v. ROSSEEL, NV, 609
F. Supp. 75 (S.D.N.Y. 1985)
24. Dutco Construction Co. Ltd, 1994 A.D.R.L.J. 36 (1994).
36

VI. Websites
1. http://arbitrationblog.kluwerarbitration.com/2018/03/21/consolidation-arbitral-
proceedings-ramifications-partys-right-challenge-jurisdiction-tribunal-arbitral-
award/#comments
2. http://www.academia.edu/7146989/TYPES_OF_LEGAL_RESEARCH_NEEDED_FOR
_L
3. http://www.newyorkconvention.org/in+brief
4. https://globalarbitrationreview.com/chapter/1178850/consolidation-of-international-
commercial-arbitral-proceedings-in-the-energy-secto
5. https://law.emory.edu/eilr/content/volume-25/issue-3/recent-development/icc-rule-
consolidation-progress-change.html
6. https://www.jstor.org/stable/10.3366/j.ctt1g0b16n.7
7. https://www.juridicainternational.eu/public/pdf/ji_2007_1_15.pdf
8. https://www.researchgate.net/publication/228214375
9. https://www.riigikohus.ee/en/case-law-analysis/methodology
10. http://www.arbiter.com.sg/pdf/rules/SIAC%20Arbitration%20Rules%20(2016).pdf
11. www.siac.org.sg/images/stories/press_release/2017/Memorandum%20on%20Cross-Insti
tutional%20 Consolidation%20(with%20%20annexes).pdf
VIII. Arbitral Rules

1. China International Economic and Trade Arbitration Commission (CIETAC)
2. Singapore International Arbitration Centre (SIAC)
3. Hong Kong International Arbitration Centre (HKIAC)
IX. National Laws

1. Hong Kong Arbitration Ordinance
2. Netherlands Arbitration Act
3. California Civil Procedure Code
4. New York Civil Practice Laws & Rules
5. Massachusetts Uniform Arbitration Act
6. English Arbitration Act
7. France Code of Civil Procedure
X. International Conventions
1. United Nations Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, New York Convention
37

XI. International Conference & Reports
1. Working session of 19/08/94, having Maître Jean Lisbonne as Chairman, in Report of the
Sixty Sixth Conference of the International Law Association, Buenos Aires Conference
1994, The International Law Association, London, 1994
2. Gerald Aksen, in a paper presented at the International Arbitration Symposium in Warsaw
in 1980
3. Department Advisory Committee on Arbitration Law (the DAC) Report on the Arbitration
Bill, 1996
38

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International Commercial Arbitration Law

Consolidation of arbitration without parties’ consent: a threat

By: Pooja Damodaran

Electronic copy available at: https://ssrn.com/abstract=3662152

I. A tale of a spider: introduction ....................................................................5

1.1. Aim and Purpose ........................................................................................6

1.2. Research inquiries and thesis structure ....................................................6

1.3. Methodology, thesis structure and legal sources.......................................7

1.4. Scope and Limitation ..................................................................................8

II. Intertangled spiderweb: consent & consolidation .......................................9

2.1. Consent Conundrum ................................................................................ 11

2.2. Efficiency dilemma ................................................................................... 13

2.3. Chapter Conclusion ................................................................................... 13

III. Spider spinning web: framework of compulsory consolidation ................. 14

3.1. Compulsory consolidation under arbitration institutions ..................... 14

3.2. Court ordered compulsory consolidation ................................................ 16

A) Express authorization of law ..................................................................... 16

B) Implied authorization and broad interpretation of law ........................... 18

3.3. Chapter Conclusion ................................................................................... 21

IV. Untangled spiderweb: analysis on repercussions of compulsory

4.1. Consent-less consolidation and pitfalls .................................................... 23

4.2. Consequence of consent-less consolidation.............................................. 26

4.3. Chapter Conclusion .................................................................................. 28

V. Disentangled spiderweb: Compulsory consolidation- the way forward ..... 28

5.1. Solutions and recommendations to compulsory consolidation .............. 28

5.2. Fading of compulsory consolidation and new developments ................. 29

5.3. Chapter Conclusion ................................................................................... 31

VI. Final Conclusion ....................................................................................... 32

Electronic copy available at: https://ssrn.com/abstract=3662152

Et al. And others

i.e Id est (that is)

E.g. Exemplum gratia (for example)

F.Supp Federal Supplement (District Court Reports)

HKIAC Hong Kong Administered Arbitration Rules

SIAC Singapore International Arbitration Centre

CIETAC China International Economic and Trade Arbitration

ICC International Chamber of Commerce Rules

LCIA London Court of International Arbitration Rules

FAA Federal Arbitration Act

Ibid. In the same place

New York Convention Enforcement of Foreign Arbitral Awards

Electronic copy available at: https://ssrn.com/abstract=3662152

Electronic copy available at: https://ssrn.com/abstract=3662152

Electronic copy available at: https://ssrn.com/abstract=3662152

1.1. Aim and Purpose

1.2. Research inquiries and thesis structure

Electronic copy available at: https://ssrn.com/abstract=3662152

Electronic copy available at: https://ssrn.com/abstract=3662152

• Comparative elements and case law analysis

1.4. Scope and Limitation

Electronic copy available at: https://ssrn.com/abstract=3662152

II. Intertangled spiderweb: consent & consolidation

Electronic copy available at: https://ssrn.com/abstract=3662152

Electronic copy available at: https://ssrn.com/abstract=3662152

2.1. Consent Conundrum

Electronic copy available at: https://ssrn.com/abstract=3662152

Electronic copy available at: https://ssrn.com/abstract=3662152

2.2. Efficiency dilemma

Electronic copy available at: https://ssrn.com/abstract=3662152

III. Spider spinning web: framework of compulsory consolidation

3.1. Compulsory consolidation under arbitration institutions

Electronic copy available at: https://ssrn.com/abstract=3662152