Binding Non-Signatories to Arbitration Agreements. The issue of Consent in International Commercial Arbitration.

Abstract

Arbitration is a method frequently used throughout the world to settle disputes in the international arena. As it is a private procedure beyond the public eye with experts as judges and results in an award that generally is easier to enforce than court judgments, it may be the most efficient way of settling international disputes. To be entitled to commence arbitral proceedings instead of litigation, the only requirement is an agreement between two or more parties to do so.

If a dispute then later arises where a third party, not signatory to the agreement, is so intertwined with the dispute that it seems impossible or maybe even unnecessary to resolve it without this third party being part of the proceedings, he cannot technically take part in the arbitration. If such an issue is at hand, or if a third party itself wants to invoke arbitration against one of the signatories, courts and arbitral tribunals have developed methods through which third parties can be bound to an arbitration agreement without its expressed consent. Using these methods can at first glimpse be seen as a measure of fairness and efficiency, however problems arise as the very foundation of arbitration, the consent of the parties, are bargained with. This thesis therefore explores the justifications behind two of the methods used today, the arbitral estoppel theory and group of companies doctrine, and discusses the implications they have on consent.