KluwerArbitration
Multi-Contract Arbitration
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Philippe Leboulanger
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Journal of International
Arbitration
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Introduction
Philippe Leboulanger,
'Multi-Contract Arbitration',
Journal of International
Arbitration, (© Kluwer Law
International; Kluwer Law
International 1996, Volume
13 Issue 4) pp. 43 - 97
In recent years, arbitral practice has witnessed the development of complex arbitrations
as well as the specific procedural difficulties inherent thereto. A great source of such
problems can be found in the large number of interrelated agreements involved in the
performance of major projects, namely in the engineering, construction, raw materials,
mining and oil sectors. These complex contractual relationships may give rise to parallel
arbitrations and to situations in which the unity of the arbitral proceedings may be
affected by the multiplicity of issues, agreements or parties involved in a certain dispute.
However, international arbitration, which was tailored to the traditional two-party model
involving a single contract, does not always provide satisfactory solutions to the
procedural problems brought up by complex arbitrations.
As these situations have become very frequent in today's international business world,
various authors have proposed solutions to the difficulties, some pleading for compulsory
consolidation of parallel arbitral proceedings by court order, others for having these
procedural questions governed by institutional and national rules regarding
international arbitration. But there is no generally agreed opinion about the best way to
handle procedural problems regarding complex arbitrations.
Strangely enough, in some aspects, domestic litigation seems better adapted to certain
situations than international commercial arbitration, namely those involving related
proceedings. Whereas courts in both civil-law and common-law countries are empowered
to order joinder irrespective of the wishes of the parties in legal actions, most arbitration
institutions and most national courts have no means of consolidating two or more arbitral
proceedings without the consent of the contracting parties. This backward position is
regrettable, especially in view of the fact that arbitration is expected to provide more
efficient solutions than litigation to the difficulties found in international business today.
It is rather astonishing to observe that most of the literature about complex arbitration
deals with multi-party arbitration, whereas the situation of parallel proceedings in multiP 44 contract arbitrations involving two parties only—a situation much simpler than multiparty arbitration and which has become very frequent—seems to have been ignored by
doctrine. (1)
Taking into account the place that authors have dedicated to this hypothesis and the fact
that multi-contract situations involving two parties only have been put into the same
basket as multi-party arbitrations, one may be tempted to consider that the same
conclusion which has been drawn up for multi-party arbitration should be applied to biparty arbitrations. Actually, some solutions proposed for the former can be applied to
the latter, but these solutions are not totally transposable, as two-party arbitrations give
rise to very specific problems and present neither the same degree of complexity nor the
same difficulties as multi-party arbitrations.
The main problem encountered in multi-party arbitration arises from the fact that
arbitration rests on consensus; (2) bringing and forcing a third party before an arbitral
tribunal represents a violation of the main premise of the classic theory of absoluteness,
that is the autonomy of will. (3) This problem does not exist in the context of two-party
arbitrations, where no third parties are involved in the proceedings, and where the legal
link remains bipolar, since both parties are tied to arbitration by one or several
arbitration clauses.
Whereas it is commonly agreed that consolidation is desirable, consolidation of multiparty arbitrations is considered to be unworkable. On the other hand, as will be
demonstrated hereinafter, for multi-contract arbitrations involving two parties only,
consolidation is not only attractive, but also practicable. It should be kept in mind that
multi-contract arbitrations involving the same parties, or involving two parties only, are
situations which should be distinguished from multi-party arbitration. Accordingly, the
former should not be condemned by the criticism addressed specifically to the latter; it
would be not only unjust but also illogical to put multi-contract arbitrations in the grave
on the grounds of the death penalty which was ordered exclusively against multi-party
arbitration.
The procedural difficulties found in complex arbitration cannot remain indefinitely
cannot
ignore these situations [complex arbitrations] which have become the norm in present
day international commerce.” (4)
P 45 unanswered. As pointed out by Horacio A. Grigera Naon: “...the law of arbitration
As a matter of fact, it appears that joinder of interrelated parallel proceedings—as
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currently practised by national courts—is a very useful procedural rule, which could
easily be transposed to multi-contract arbitrations involving two parties only. The aim of
the present discussion is not to make an exhaustive comparative study of the role played
by the rule of joinder in the different arbitral rules and law systems, but simply to suggest
some ideas and considerations about incorporating this principle into the development
of procedural rules in international arbitration. Sir John Donaldson once said that “...the
rules and procedure governing arbitration are a living thing which inevitably require
statutory amendment from time to time in the light of experience and changing
conditions.” (5)
Although multi-contract situations may involve two or more parties, this study deals only
with multi-contract situations involving two parties only, which require the joinder of
parallel arbitral proceedings. Part One of this article discusses the procedural aspects of
multi-contract situations, that is the necessity of applying the rule of joinder to certain
multi-contract situations. Part Two examines how parties, arbitration institutions and
arbitrators deal with multi-contract situations, and analyses whether the concept of
joinder finds any substantial alternative remedy. A list of contents is annexed.
Part One: Procedural Aspects of Multi-Contract Situations
In the international business world, a contractual relationship between two or more
parties may involve a multi-contract situation. (6) This is a broad concept characterized
by the presence of two or more interrelated contracts, irrespective of the number of
parties involved. It includes not only groups of contracts (that is, contracts which,
although formally independent, are part of a single transaction or operation) but also
cases where there are several agreements, having no connection with each other,
between the same parties. This idea includes, for example, (7) groups of contracts:
contrats composés; contrats complexes; contrats annexes; contrats mixtes; contrat
principal, or contrat de base/contrat accessoire; framework agreements followed by
application agreements: (8) sous-contrats; joint-ventures, groupements d'entreprises;
contrats unis; contrats liés. (9) The following developments will be limited to situations
regarding groups of contracts. Only a brief analysis of some cases, and not a full
P 46 comprehensive study, will be presented here.
The concept of groups of contracts (10) is one of the “products” of the modern world. (11)
According to the classic theory of contract, each individual agreement within a group of
contracts is completely independent from the others. If there is no formal link between
agreements, each one of them is considered to be an extrinsic fact regarding the others.
However, this traditional notion does not correspond to current contractual practice. (12)
Actually contractual relationships usually involve long-term economic operations
comprising a large number of distinct, but interrelated, contracts. In many cases, the
different kinds of agreements seem to give rise to an indivisible transaction, an
economical and operational unit “hidden” behind a multi-contract façade, that actually
amounts to one fundamental single relationship. The sale of a piece of real estate, for
example, has become a very complex operation, which sometimes requires the
conclusion of a variety of complementary or ancillary agreements, such as a financing
agreement, a mortgage and securities. Accordingly, the sale becomes the main element
and the goal of an operation which is not limited to it. (13)
The notion of interrelated agreements takes into account this reality and defines
agreements in relation to the business context in which they operate and to the purposes
they are meant to serve, as discussed in SectionI, below. This concept has contributed to
implementing joinder in multi-contract situations. Joinder of proceedings is a procedural
rule which is known in the domestic laws of many countries. SectionII refers to French law
of civil procedure for the purpose of illustrating the tools law provides for the joinder of
civil actions regarding multi-contract situations. This will help determine, in SectionIII,
the extent to which similar solutions are conceivable and desirable for bi-party
P 47 arbitration proceedings.
I. The Concept of Interrelated Agreements
Whenever there is an economic link between contracts, ensuing from the contracts’
nature and mutual function, these agreements should not be regarded as autonomous
agreements, but should be analysed together with all the other related contracts.
However, parties may disagree about the existence of an interrelation between such
contracts: an analysis of doctrine, case-law and arbitral practice concerning interrelated
agreements shall provide, below, some guidelines as to determining when distinct
agreements should be appreciated on an overall basis.
A. Doctrine, case-Law and arbitral practice
The fact that the litigious obligations arise from different instruments is not a reason in
itself to refuse to admit the interrelation between the disputes. The interplay between
the obligations, as well as the context in which the parties’ business relationship was
developed have to be taken into account. If the undertakings are indivisible, i.e. when
they are all integrated parts of a single transaction, the disputes regarding obligations
arising out of the various related agreements should be treated as a whole. The concept
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of interrelated agreements as an instrument of legal realism, as shown below, has been
sustained by eminent scholars and judges and has been applied by arbitrators.
Accordingly a realistic attitude towards the link that exists between agreements should
be adopted, as economic considerations play a central role in modern law of contracts. A
formal attitude towards the interrelation between the obligations would be a resistance
against international trade law and contract law modern reasonings.
1. French Doctrine and the Courts’ Position
(a) Doctrine
The notion of interrelated agreements or interrelated obligations (obligations connexes in
French) is grounded on the idea of a narrow link between two reciprocal credits, such as
two obligations arising from the same contractual relationship. It is based on the
investigation of the foundations and functions of the contract. Two or more obligations
are interrelated when they arise out of a synallagmatic agreement. Interrelation is the
link which joins two debts undertaken under the same legal relationship and which allows
the interplay of a set-off between these debts. (14) This concept has been defined in a
rather flexible way for reasons of fairness and logic. It would be unfair to force one of the
parties to perform its obligation if the other party has not performed its own. This
P 48 reasoning could, for instance, be used for the application of the exceptio non adimpleti
contractus principle to interrelated obligations. (15) It has been sustained that case-law
concerning interrelation is based on the idea of right of retention (droit de rétention), that
corresponds to the legal and contractual practice of settling an account (comptes de
règlement), as well as on the idea of interdependence, a concept inherent to the notion of
account (compte). (16)
However, the concept of interrelation is not a new idea. Already, for Professor René
Cassin, interrelation was a notion that could be applied to an indefinite number of
situations because of its subjective and intellectual character. This author explained how
the idea of connexum (a logic chain reaction) contributed to the evolution of the law of
contracts. It was through this concept that a formal perception of obligations gave way to
a rather “realistic” concept of contract. (17) This view is shared by Philippe Kahn, who
considers that “the mutuality of the parties’ obligations should be established on an
overall basis”, and not on a contract by contract basis. (18) Other authors also consider
that a priori autonomous elements of a set of contracts (ensemble contractuel) should be
appraised on an overall basis. (19) In fact, concluding a business transaction either
through an agreement which includes several annexes or through a series of interrelated
contracts is a practice largely carried out by businessmen all over the world. Philippe
Kahn explains that, nowadays, even a simple sale may often require a large quantity of
contractual instruments and that these instruments must be interpreted as a whole, as
they are interdependent documents. (20) Such an interpretation is imperative when two
conditions are met: if the documents are binding towards the parties involved and if they
are not contradicting among themselves and, theoretically, form a coherent, harmonious
and articulated whole.
The questions of interrelation and of determining the effects of the non-performance of
obligations arising from an agreement which is part of an ensemble contractuel also occur
in joint-ventures. The issue of determining the legal effects of the economic link which
ties the several agreements making up the joint-venture was commented on by Professor
Claude Reymond, who explained that the non-performance, by one of the parties, of an
obligation undertaken under the protocole de base entitles the other party to terminate
it. (21) Similarly, the non-performance of one of the agreements making up the jointventure also authorizes the suspension of the performance of obligations undertaken
under another, on the grounds of the exceptio non adimpleti contractus principles and, if
necessary, their termination. According to the author, these agreements constitute a
P 49 single unit, a group of intertwined complex contracts, which are linked to each other, in
spite of the fact that, legally, they constitute distinct instruments. Consequently, one
must take into account the reciprocity (rapport d’échange) which exists between them, an
exchangeability just like that which exists between obligations arising from a single
contract. (22)
(b) Case-law
French courts have made a practical application of the notion of interrelation, by
considering interdependent contracts as a single functional unit and by appraising
distinct elements of a single transaction on an overall basis. They have often admitted
the existence of interrelation whenever there were regular and reciprocal commercial
transactions, that is, whenever the concomitant purchases and sales of goods, and the
successive agreements which gave rise to these balanced exchanges, are commercially
and economically tied. (23) According to a recent decision of the Cour de cassation,
interrelation may result not only from reciprocal obligations arising from the same
contract, but also from reciprocal obligations arising from different contracts. (24) There
is interrelation between contracts whenever there is a framework contract expressly
agreed upon, and whenever the reciprocal credits arise from the application contracts,
for instance in long-term sale or distribution agreements. (25)
The unity of the operation, if it is not materialized within a general framework agreement,
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may arise from the relationship that ties, for example, two supply agreements (contrats
d'approvisionnement). In a decision of 9 May 1995, (26) the Cour de cassation concluded
that:
“...in the absence of reciprocal obligations arising out of the same agreement,
interrelation may exist between credits and debts arising out of sales and purchases
concluded in order to perform an agreement which has defined, between the parties, the
framework for the development of their business relationship or from several agreements
which constitute the elements of a single contractual set serving as a general framework
for these relationships.” (27)
According to the Cour de cassation, in rejecting the set-off on the grounds of the absence
of interrelation between the litigious debts due to the plurality of contracts and the
absence of a framework agreement, the Court of Appeal has not drawn the appropriate
P 50 legal consequences to the facts at stake because:
“...the two supply agreements of 1 January 1991, which were implemented through the
reciprocal sales and purchases of the same animals, carried out by société Lapidor, were
tied to each other and constituted two parts of a single contractual set serving as a
general framework for the business relationship of the parties...” (28)
2. Arbitrators’ Attitude
Interrelation between contracts having no formal link has also been recognized by
arbitrators. An ICC Arbitral Award, dated 2 July 1987, (29) states that, although there is no
formal link between the two contracts involved, there is an evident substantive
interdependence:
“...without the materials which claimant undertook to supply, defendant was unable to
carry out the manufacture of the heat exchangers.” (30)
In the Klöckner v. Cameroon Arbitral Award, rendered on 21 October 1983, (31) under the
aegis of the ICSID, through a “commercial reality” analysis, the arbitral tribunal, by
applying the law of the Republic of Cameroon, (32) considered the reciprocal obligations
as a single legal relationship despite the existence of separate and successive
instruments governing the rights and obligations of the parties.
Other examples of an “economic reality” analysis can be found in the ICSID Arbitral Award
of 23 September 1974, Holiday Inn v. Morocco, where the arbitrators applied Moroccan
law:
“It is well known, and it is being particularly shown in the present case, the investment is
accomplished by a number of juridical acts of all sorts. It would not be consonant either
with economic reality or with the intention of the parties to consider each of these acts in
complete isolation from the others. It is particularly important to ascertain which is the
act which is the basis of the investment and which entails as measures of execution the
other acts which have been concluded in order to carry it out.” (33)
In other cases, however, it was not possible to draw the legal consequences of the
interrelation between contracts. By reading the arbitrators’ reasoning in these awards a
contrario, it is possible to determine when interrelation between arguments should be
taken into account. In ICC Award No. 6829 of 1992, in which the law of Luxemburg was
applied, the arbitral tribunal did not consider the agreements as a single legal
relationship because “both the intentions of the parties and the language of the relevant
legal instruments do not permit such an approach”. (34) For this reason, the jurisdiction of
P 51
the arbitral tribunal was confined to one contract alone. (35) This may lead us to
conclude that if the “intentions of the parties” as well as the “language of the relevant
legal instruments” do “permit”, interrelated agreements should be treated on an overall
basis and arbitrators may extend their jurisdiction to connected agreements.
In an award rendered by the Chamber of National and International Arbitration of Milan
in 1992, regarding subcontracts in construction works, by applying Italian law, the
arbitrators considered the economic-legal link between contracts, ensuing from the
contracts” nature and mutual function as follows:
“...a subcontract cannot be seen as a contract derived from the main contract, but rather
as a contract with a certain autonomy, although interrelated to the original contract by
an economic and functional link which normally, however, is not juridically relevant.” (36)
According to the arbitral tribunal, interrelation between contracts and its consequences
are possible—subject, however, to certain conditions. The economic and functional
connection between the contracts is not enough. The contracts must refer to each other in
an univocal and clear manner and the link between the agreements must entail a mutual
dependence and interdependence. (37)
In the situations referred to above, that is the solutions given by doctrine, judges and
arbitrators reveal a certain tendency by taking interrelation into consideration in multicontract situations. Thus, it may be reasonable to recognize that the above-mentioned
solutions can be considered as representative of a well-established practice having the
force of a general principle of international arbitration. Accordingly, doctrine, case-law
and arbitral awards may provide some guidelines for determining when multi-contract
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situations should be treated as a whole.
B. Guidelines for determining when multi-contract situations should be treated as a
whole
In some cases, related agreements should be considered as one business transaction and
P 52 interpreted according to their contents, regardless of the fact that the contractual
relationship between the parties consists of different agreements. The business context
which gave rise to the transaction cannot be ignored. An agreement, as illustrated below,
needs to be analysed in the light of the negotium and of the instrumenta
1. One Single Business Relationship (the Negotium)
It is important to take into account the commercial reality of the operation, because
sometimes the parties’ reciprocal synallagmatic obligations arise not from a single
contract, but from different contracts. It should be checked whether the obligations
undertaken under the different agreements are reciprocal, having a common origin,
identical sources and an operational unit.
An example which serves to illustrate this situation is the following: two parties (A and B)
enter into four interrelated long-term agreements on the same date, i.e. the General
Agreement and there ancillary agreements—the Purchase Agreement, the Processing
Agreement and the Financing Agreement. These contracts are all tied by an interrelation
link and they make up one single business transaction regarding one single substance,
the sale and supply of a certain raw material and its processing. A undertook to buy
annually a given quantity of a certain raw material from B for a given price under the
Purchase Agreement and to process a given quantity of raw material belonging to B under
the Processing Agreement. In order to render the purchase/processing operation
possible, the parties concluded the Financing Agreement, under which B undertook to
lend A a given sum of money for the refurbishment of its plant. This financing allowed the
creation of an integrated system of production capable of processing the quantities of
raw material specified in the Purchase and Processing Agreements.
This case involves a sole bilateral relationship, because the two instruments at stake, the
Processing Agreement and the Purchase Agreement, together with the other two
instruments, the General Agreement and the Financing Agreement, are bound together by
a close connecting factor: agreement was reached for the financing, by B, of the
refurbishment of a processing plant, in return for the payment, by A, of a given price for
the purchase and processing B’s raw material. The obligations were assumed for the
accomplishment of a single goal, and are thus interdependent. It is important to search
for the parties’ intent at the moment of the conclusion of the agreements. Whenever the
signature of one or more agreements is the reason that leads the parties to sign another
agreement or agreements, it can be considered that there is a link between them. It
seems logical to conclude that disputes arising out of these agreements should be
treated together. B would not have lent A money for the refurbishing of the processing
plant if A had not undertaken to pay the agreed price to purchase and to process B’s raw
material for the full life of the investment. The payment of the agreed price on the
Purchase Agreement was thus the essential condition (the cause impulsive et
déterminante) to the investment regarding the Financing Agreement. Therefore, if the
P 53 peformance of two of the four agreements gives rise simultaneously to disputes, these
disputes should be treated together.
When the agreements make up one single business transaction, the interplay between
the undertaking cannot be ignored, as there exists within the contractual context a kind
of freedom of circulation of obligations and interrelated debts. Whenever obligations
were undertaken for the accomplishment of a single goal and are economically
interdependent, the different disputes should be appreciated on an overall basis.
2. The Contractual Instruments (the Instrumenta)
Indications of the interrelation between agreements may be found not only in the “spirit”
of the business transaction, but also in the instrumenta, that is, in the wording of the
agreements.
Agreements may be considered to be interrelated when they were concluded on the
same date, for the same duration, for the same purpose. Another indication of the
interrelation between contracts is the presence of a general—or a master, a cover, a basic
or a head—agreement outlining the obligations undertaken by the parties, obligations
which are usually discussed in more detail in the ancillary agreements. General
agreements often contain a preamble describing the transaction and the interrelation
between the different agreements. In this case, the interdependence between a general
agreement and its ancillary agreements is evident, especially when the general
agreement expressly refers to each one of the ancillary agreements and each one of the
ancillary agreements expressly refers to the general agreement and to the other ancillary
agreements. Interrelation also exists in the context of framework and application
agreements. (38)
In the presence of unifying contractual mechanisms contained in the different
agreements, there is reasonably no room for doubt about the fact that these agreements
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have no independent existence without each other. For instance, the following clauses
appearing in a general agreement regarding the supply of a raw material and its
processing should be viewed as evidence of the interrelation between three agreements
—the General Agreement, the Purchase Agreement and the Processing Agreement:
“1. Each party represents and warrants to carry out fully and diligently its undertakings
according to this Processing Agreement as well as according to the Purchase Agreement.
Any failure of each party to fulfill its undertaking according to any of the Agreements
referred to above will also be considered as a breach of the engagement subject-matter
of the other.”
The following clauses appearing in the Processing Agreement also demonstrate the unity
P 54 of the operation:
“1. The dispositions dealing with force majeure as defined in Article X of the General
Agreement shall apply to this Processing Agreement.
2. The dispositions dealing with ‘stoppage’ as defined in Article Y of the General
Agreement shall apply to this Processing Agreement.
3. The dispositions of Article Z of the General Agreement shall apply to this Processing
Agreement.”
There is interrelation between contracts in the presence of a “stoppage” mechanism
according to which a declaration of “stoppage” by either of the parties has a direct and
immediate effect on the validity and/or continued performance of another, or other,
agreements, despite the fact that the economic circumstances which are a precondition
of a “stoppage” declaration arise mainly under an activity which concerns only one of the
agreements.
A stipulation concerning the simultaneous performance of the parties’ synallagmatic
obligations under the different agreements is also evidence of interrelation. The
following clause appearing in the General Agreement can illustrate this intention:
“The parties acknowledge that the execution and performance of this General Agreement
and of each of the Agreements is part of a general deal agreed between them and that,
unless otherwise specifically provided for in each of the Agreements, it is the intent of the
parties that the Agreements be performed simultaneously...”
If it were stipulated that the Agreements must be performed simultaneously, one may
reasonably think that, in case of simultaneous disputes, the intent of the parties was to
have them settled simultaneously.
Contractual relationships are not “limited to the corners of the written document, but are
equally defined by factual, external circumstances” (39) Actually, the interrelation
between agreements should be reflected in the proceedings; multi-contract situations
call for the application of the rule of joinder whenever there are interrelated disputes at
stake.
II. The Rule of Joinder
Joinder is a procedural rule based upon a fundamental principle—the good
administration of justice. The aims are:
– to secure justice between the parties, by avoiding conflicting decisions for related
issues, such as may occur in separate proceedings;
– to serve procedural efficiency; and
to save time and costs, namely by co-ordinating the taking of evidence.
Consolidation of parallel proceedings prevents extensive or complicated issues which
are interrelated from being appraised separately. By having all the necessary issues
P 55 before it, the court in a consolidated proceeding is likely to reach a more complete
understanding of the facts in dispute so as to render a decision. The risk of factual errors
should actually decrease in consolidated proceedings, as different tribunals may reach
different conclusions based on the same evidence because they can arrive a different
conclusions of fact. Judging intertwined issues separately may cause great and
irreparable injustice under certain circumstances. For this reason, joining parallel actions
contributes to bringing considerable efficiency and unity to the proceedings and also
avoids the risk of conflicting decisions.
The rule of joinder is part of several legal systems and, as shown below, is applied to
litigation as well as to arbitration.
A. Joinder of parallel court proceedings
The rule of joinder is a well-accepted principle in several countries. The purpose here is
not to make a complete report on the solutions adopted in the different laws and caselaws regarding the question of joinder, but only to provide an example of how this
principle has been implemented in litigation. For this reason, the study will be limited to
a brief analysis of joinder under French law. In France, there are two possible ways of
obtaining joinder of related civil actions: through the rule of joinder set forth by Article
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367 of the French New Code of Civil Procedure (the New Code); and through the exception
de connexité provided by Articles 101 et seq. of the New Code.
1. The Rule of Joinder Set Forth by Article 367
Article 367 of the New Code allows consolidation of civil actions that involve related
issues. According to this text, a court may—either at the parties’ request or ex officio—
order the joinder of pending proceedings introduced before it, for the sake of good
administration of justice, whenever there exists between the issues such a link requiring
that they be examined and ruled together. (40)
According to Article 368 of the New Code, a decision regarding the joinder of proceedings
constitutes an administrative measure not subject to appeal. The application of the rule
of joinder requires compliance with two conditions: there must be connexity; and the
proceedings to be consolidated must be pending before the same court. Whereas the
second condition does not present a priori any major difficulty, the meaning of connexity
is open to doubt. As the notion of connexity does not rely on any precise criterion, judge
have discretionary powers to appreciate when it occurs. (41) In fact, French courts may
P 56 order the joinder of several proceedings, even in the absence of identity of object and
cause, whenever there exists between the disputes such a link requiring, for the sake of
the good administration of justice, that they be settled together through a single
decision. (42)
2. The Exception de Connexité Provided by Articles 101 et seq.
(a) French domestic law
The exception de connexité (plea of connexity) is a procedural rule which applies
whenever two equally competent courts have jurisdiction over two issues, which are
different but so interrelated that the good administration of justice commands that they
be examined and ruled together. (43)
According to Article 101 of the New Code, one of these courts may be requested to decline
jurisdiction and to transfer the case to the other competent court. Judges have
discretionary powers to decide whether to accept or refuse this request. However, there
are two exceptions to this freedom of choice: whenever the referred courts are not of the
same degree; (44) and whenever one of the referred courts has exclusive jurisdiction over
the issue. (45) The judge requested to decline jurisdiction has two options:
– he may decide to decline his own jurisdiction and to refer the case to the other
court—thus, there is consolidation of the case before that court; or
– he may reject the request. In this case, he rules immediately on the merits, and
the cases are not consolidated.
The exception de connexité cannot be raised by the judge ex officio; however, it may be
raised by the parties at any moment of the proceedings, and not necessarily in limine
litis, before any defence on the merits or plea in bar. (46)
(b) French private international law
French courts rule that the exception de connexité also applies to international issues. (47)
In French private international law, as well as in French domestic law, being the second
court to which the issue was referred is not a requirement for a court to decline
jurisdiction. Either the first or the second court, confronted with the question of exception
de connexité, is free to decline or not its own jurisdiction. (48)
The Brussels Convention of 1968 on the Recognition and Enforcement of Foreign
P 57 Judgments, which is part of the French legal system, provides for a different solution.
Article 22, § 3 of the Convention defines connexity as a situation where legal actions are
so interrelated that they shall be examined and judged simultaneously, in order to avoid
contradicting decisions. The second court to which the issue is referred may either stay
the proceedings, ex officio or at the parties’ request, while awaiting the decision of the
first court to which the issue has been referred, or decline its own jurisdiction at the
parties’ request. This second hypothesis is subject to two conditions: consolidation of
interrelated issues shall be possible under the law of this court; and the first court shall
have jurisdiction over both issues—in order to avoid a denial of justice for the second
issue. Under the Brussels Convention, the exception de connexité can only take place in
situations involving courts of the first instance, a solution which differs from the one set
forth by French domestic and international rules. (49)
Although related civil actions may be joined in the situations described above, under the
New Code no rule expressly authorizes the application of these provisions in order to
consolidate arbitral proceedings. However, unlike France, some systems have an
organized consolidation mechanism for arbitration.
B. Specific provisions regarding arbitration
A comparative study demonstrates that most national legislations do not organize
joinder for parallel arbitrations. But there are a few exceptions: in some systems
consolidation is provided for by a specific text; and in certain countries judges have
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played a major role in the implementation of consolidation.
1. Treaties, Rules and Laws
Consolidation has been contemplated in some Treaties. Article 1126 of the North
American Free Trade Agreement (NAFTA—between Canada, Mexico and United States)
allows a total or partial consolidation of arbitral requests concerning foreign investments
subject to Article 1120 of this Treaty whenever the different requests have a question of
law or fact in common. In this case, a special tribunal shall be constituted, composed of
three members appointed by the Secretary-General of the ICSID. It shall apply the
UNCITRAL procedural rules and shall have jurisdiction over the issues that it considers
should be consolidated. (50)
Consolidation has also been provided for in some rules, namely the American Arbitration
Association Insurance Rules of the State of New York, which provide for the consolidation
of arbitrations regarding the same accident and concerning related facts. (51) The
P 58 Arbitration Rules of the World Intellectual Property Organization Arbitration Centre
also allow third parties to be joined into proceedings under certain conditions. (52)
Only a few countries have enacted legislative provisions regarding consolidation. As
explained by Emmuanuel Gaillard, the solutions provided for by legislators can be
divided in two categories, “false” and “real” legislative solutions. (53) Some legislations,
namely the arbitration law of British Columbia (54) and the International Arbitration Act
of Florida, (55) are considered to be “false” legislative solutions because, although they
provide for consolidation, they condition its implementation to the consent of all the
parties. In other words, these “false” solutions are closer to consensual rather than to
legislative consolidation. “Real” legislative solutions, on the other hand, allow the courts
to compel consolidation as they are based on the intervention of the lawmaker and not
only on the will of the parties. In 1982, Hong Kong issued a new Arbitration Act which
provides for judicially ordered consolidation in its Article 6B. (56) Article 1046 of the
Dutch Arbitration At contains specific provisions on consolidation of related arbitrations,
which can be ordered by the President of the District Court in Amsterdam. (57) The
Argentine draft is another example of court-ordered consolidation implemented by the
legislator. (58) The states of California (59) and Massachussets (60) in the United States
have also adopted a legislative approach regarding consolidation.
This new trend may demonstrate that it is desirable to have the legislator provide the
solution to the procedural problem of related arbitrations. (61) According to V.V. Veeder,
the Netherlands “may remain the fashionable exception rather than the rule”. (63)
There are countries which seem reluctant to adopt the consolidation solution. Most
P 59 countries of the European Union are way behind the United States and Eastern
European countries such as Poland, (64) Bulgaria and Hungary, as far as rules regarding
multi-party arbitrations are concerned. (65) It is rather astonishing to find that the
procedural difficulties raised by complex arbitrations have not been solved by the texts
enacted in France, England and Switzerland.
The powers given to French courts to control the conduct of international arbitrations are
contained in Articles 1492 et seq. of the New Code, in which no mention is made of any
power to consolidate. As explained by Emmanuel Gaillard, although French law could be
“amended by adopting a provision equivalent to Article 1046 of the Dutch Code of
Practice—which itself borrowed much from French law”, under French arbitration law, it is
only the will of the parties that can prevent the difficulties inherent in multi-party
arbitration. (66) The situation is the same in some other countries, such as England and
Switzerland. In England, for example, despite strong support for legislation enabling the
courts to order consolidation of arbitrations arising out of the same events, this solution
has not been incorporated in the draft Bill which is expected to be enacted in 1996. (67)
Court intervention naturally depends on the applicable legislation. However, in some
countries, the absence of specific rules has not prevented judges from joining or coordinating parallel arbitral proceedings.
2. Case-Law
In countries where there are no specific provisions regarding consolidation in arbitration,
joining parallel proceedings is usually impossible, unless all parties agree. However, in
the United States, some courts have compelled consolidation stricto sensu (68) by
liberally construing arbitration legislation and the rules of civil procedure. In other
countries, courts have not gone as far as American judges, but have ordered de facto
consolidation. (69)
(a) Consolidation stricto sensu
In the United States, consolidation of parallel arbitrations by the courts was developed
by case-law. The courts have played a major role, basing their decisions on laws, rules or
on the intent of the parties. Case-law is generally very daring, especially regarding
P 60 maritime arbitration; U.S. courts have ordered consolidation, sometimes changing the
agreement of the parties, sometimes changing the methods of designating arbitrators.
Until 1993, U.S. federal courts were favourable to consolidating interrelated arbitral
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proceedings. (70) Despite the split among the courts as to whether consolidation of
arbitrations should be ordered in the absence of specific agreement to that effect, until
1993 the trend of judicial decisions was to allow consolidation. Most courts justified their
position by the necessity of avoiding conflicting results, saving time and expenses, as
well as on their “inherent power to consolidate disputes”, based on the theory that the
power to enforce an agreement to arbitrate includes the authority to control the method
of enforcement such as consolidation. U.S. courts used to consider that, if the parties do
not desire consolidation, it is up to them to mention it expressly. In other words, in the
absence of express provision to this regard, the consent to consolidation was presumed.
(71) The Southern District Court of New York and the Second Circuit Court of Appeal
played leading roles in the development of case-law regarding consolidation in
arbitration by ordering consolidation even if the arbitration agreements of the parties
did not provide for consolidated proceedings, based on their liberal interpretation of the
Federal Arbitration Act and the Federal Rules of Civil Procedure. (72)
However, this favourable position towards consolidation seems to have been abandoned
by the U.S. federal courts since 1993. As a matter of fact, in a recent decision, it was ruled
that consolidation of arbitral proceedings cannot be ordered, unless there is express or
implied agreement among all the parties involved. (73)
In France, the primacy of the will of the parties seems to put strict limits on any kind of
judicial intervention regarding consolidation. It has been sustained that, in litigation,
joinder of several proceedings does not present any major difficulty, since the
determination of the court and the designation of the judges are specifically provided for
by mandatory rules of procedure and by principles of judicial administration, which
exclude the will of the parties. In arbitration, however, in the absence of a legislative
solution, court-ordered consolidation seems rather difficult, as it gives priority to the will
of the parties since this will is the basis for the powers of the arbitrators. (74) Article 1444
P 61 of the New Code allows French courts to rule on difficulties regarding the constitution
of the arbitral tribunal, but it does not empower judges to decide against what was
stipulated in the arbitration agreement. (75)
The following considerations can be made, however, concerning ad hoc arbitrations.
French procedural law can apply whenever the arbitration takes place in France, or if the
parties have agreed on the application of the French procedural rules. In these two cases,
French courts have jurisdiction over difficulties regarding the constitution of the arbitral
tribunal, according to Article 1493 of the New Code. French courts have interpreted this
Article rather widely. Accordingly, judges may rule on any moment in the “life” of the
arbitral tribunal, that is during its constitution and even after. (76) For an arbitration
taking place in France, Article 1493 could be applied as giving power to the judge to
consolidate two ad hoc arbitral proceedings since the issue of consolidation is a question
that may affect the constitution of the arbitral tribunal.
No country has gone as far as the United States; in most countries, the possibility of
consolidating proceedings depends on the parties’ consent. But there are other possible
remedies to the difficulties raised by multi-contract situations.
(b) De facto consolidation
Consolidation is not the only way of dealing with the problem of related arbitrations. For
instance, the London Court of Appeal avoided the risk of contradicting awards by
appointing the same arbitrator in two parallel proceedings in order to obtain a de facto
consolidation or the harmonization of such proceedings.
In Abu Dhabi v. Eastern Bechtel, (77) the parties referred to the Court the question of
whether separate arbitrators or the same arbitrator should be appointed for two
arbitrations. Lord Denning held that the Court had power, under Section 10 of the
Arbitration Act 1950, to appoint the same arbitrator to both arbitrations:
“It seems to me that there is ample power in the Court to appoint in each arbitration the
same arbitrator. It seems to me highly desirable that it should be done so as to avoid
inconsistent findings. On the other hand, it is equally desirable that it should be done so
that neither party should feel that any issue has been decided against them beforehand
or without their having an opportunity of being heard in the case. It seems to me that the
solution which was suggested in the course of the argument should be adopted, namely
that the same arbitrator should be appointed in both arbitrations: but, at an early stage,
he should have what may be called a ‘pre-trial conference’ with all the parties in the two
arbitrations.”
In Hong Kong, by virtue of the Arbitration Ordinance of 1982, courts can order not only
consolidation of proceedings but also that two arbitrations be “heard together”, which
P 62 means that the case should be heard by the arbitrators at the same time. In this case
there are separate awards and not one award affecting all parties. Under Section 6B of
the Ordinance, the court also has the power to order that one arbitration 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. (78)
In France, it does not seem possible for judges to order de facto consolidation, at least for
multi-party arbitration. An analysis of French case-law demonstrates that French courts
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are very careful about not modifying the will of the parties. (79) However, it should be
noted that ordering de facto consolidation in parallel bi-party ad hoc arbitrations
regarding a multi-contract situation does not seem to go against this philosophy.
The above-mentioned legislations and decisions, which provide for court-ordered
consolidation of arbitral proceedings, have been criticized—mainly on the grounds of
violation of the parties’ autonomy. But, in fact, this limitation upon the parties’ freedom
to contract can be justified for several reasons, which will be discussed below.
III. Desirability of Consolidating, Parallel Proceedings in International Arbitration
An analysis of whether the joinder rule can be and should be applied to arbitration must
take into account the specificity of arbitration, especially its contractual nature. If we
refer to multi-party arbitration on numerous occasions, it is because, as mentioned
earlier, most of the literature dealing with complex arbitrations is based solely on multiparty arbitrations and does not make any distinction regarding bi-party arbitrations.
However, these two hypotheses, although presenting some similarities, are very different
in several aspects. It will be demonstrated that, whereas the advantages of consolidating
multi-party arbitrations can be applied to bi-party arbitrations, its disadvantages do not
occur in the context of bi-party arbitrations.
A. Advantages
There are at least two strong reasons to join parallel arbitral proceedings: resolving all
the related disputes in one single proceeding is desirable because it greatly contributes
to saving time and money and it avoids the risk of inconsistent awards.
1. Saving Time and Money
Whenever disputes arise from the same facts or from related facts, consolidation greatly
contributes to saving time and money. (80) The constitution of a single arbitral tribunal
P 63 with jurisdiction over the issues of the two or more parallel disputes will have a direct
impact on decreasing the arbitral costs, as joinder will avoid the constitution of
unnecessary tribunals and will thus reduce arbitral fees. The costs regarding the
presentation of evidence will also be reduced, as witness and expert testimonies will be
brought before a single tribunal; consolidation thus contributes to avoiding the
unnecessary costs of a double presentation of evidence.
2. Prevention of Inconsistent Awards
Consolidation of arbitral proceedings contributes to the good administration of justice
(81) and avoids contradiction in the settlement of related disputes. (82) It has been
sustained that it is inadmissible to have contradicting decisions regarding interrelated
disputes, as this may result in actual denial of justice. (83) The splitting of complex
disputes leaves the door open to inconsistent decisions and to injustice. (84) Reducing or
avoiding problems which may arise from inconsistent or contradicting awards is a
question of the greatest importance, especially with regard to countries which have
ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign
Arbitral Awards or countries which have national legislation containing similar
enforcement provisions. Judicial review of arbitral awards in these countries is usually
limited to a simple control, that is essentially a procedural regularity test. Inconsistent
awards may give rise to serious problems at the enforcement stage, especially because
they cannot be reconciled by courts examining their merits or their reasoning. But this
idea is not incontestable. It has been sustained that the form in which arbitral awards are
often drafted, i.e. as monetary damages, renders their enforcement impossible only very
rarely, even when they are inconsistent. (85) However, this reasoning ignores specific
peformance difficulties and further does not take into account the evils of the
enforcement of conflicting awards which, even when possible, may give rise to
inequitable situations. (86) This kind of unjust result is not desirable and may weaken
confidence in the process of arbitration. (87)
According to V.V. Veeder (commenting on the Hong Kong Arbitration Ordinance of 1982),
the practical advantage of an order for formal consolidation is that the arbitrator can
then make interlocutory orders affecting all parties to the consolidated arbitration. The
P 64 arbitrator could also make one award affecting all parties, and not separate awards in
each arbitration. (88) As explained by the author, the court in the Second Shui On case
ordered consolidation of the two arbitrations on the grounds that “it increased the power
of the sole arbitrator and facilitated the better disposal of the issues between the three
parties”. (89)
All the advantages mentioned above regarding the consolidation of multi-party
arbitration should, of course, apply a fortiori to bi-party arbitrations.
B. Disadvantages
Much has been written about the disadvantages of consolidating parallel arbitral
proceedings in the context of multi-party arbitration. However, as will be discussed
below, these criticisms are not necessarily relevant to parallel multi-contract
arbitrations involving two parties only.
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The main argument put forward is the fact that the element of compulsory court control
in the arbitration process is inconsistent with the consensual aspect of arbitration, which
is one of its fundamental features. Consolidation of multi-party arbitral proceedings has
also been held to be unworkable. The arguments raised against consolidation include:
unforeseen changes in the selection of arbitrators; problems regarding the constitution of
the arbitral tribunal; depriving a party from judicial access; unfair apportionment of fees;
and enforcement difficulties.
However, these problems, inherent in the very nature of multi-party disputes, do not
exist in the context of two-party arbitration, as the relationship remains bipolar despite
the existence of several agreements. An analysis of the disadvantages of consolidation in
multi-party arbitration and its comparison with two-party situations shows that there is
no disadvantage to consolidation in the latter case.
1. Inconsistency with the Parties’ Consent
One of the reasons raised against the consolidation of arbitral proceedings is the fact
that arbitration is a contractual method of settling disputes, and consolidation may
come up against difficulties regarding different interpretations of the ratione materiae
and ratione personae of the parties’ consent.
The contractual aspect of arbitration inhibits legislators and judges from applying the
joinder rule to arbitration. In most countries, the law and the courts have not stepped in
to enforce consolidation of related arbitral proceedings because it is believed that this
would be an infringement of the rights of the parties to have their disputes settled in
private, in the way they wish. (90) This is also the reason why arbitration institutions are
rather reluctant to join parallel proceedings.
P 65 It is therefore convenient to analyse the scope of the parties’ consent in the light
of:
the intervention of third parties; problems regarding confidentiality; and the absence of
provisions regarding consolidation.
(a) Intervention of third parties
A major obstacle to consolidation in multi-party arbitration is the incompatibility
between the contractual nature of arbitration and the intervention of third parties. (91)
This situation may give rise to difficulties because the voluntary or requested
intervention of third parties requires the agreement of all the parties, and the third party
involved must give its own consent to participate in the arbitration.
In a two-party arbitration there is no incompatibility between the theory of the autonomy
of will and consolidation. Whereas the application of the theory of groups of contracts or
contractual units (ensembles contractuels) to multi-party disputes is questionable, as a
contract cannot have any affect beyond its own parties, (92) the application of this theory
to two-party disputes does not seem to encounter any major difficulty. In addition, the
problems regarding the obtention of all parties’ consent as to the intervention of third
parties in the proceedings as well as the third parties’ consent are not present.
(b) Questions regarding confidentiality
The confidential character of arbitration is often viewed as a good reason not to
consolidate multi-party arbitration. (93) A compulsory procedure may violate the secrecy
of the arbitral process chosen by the parties. Although a consolidated proceeding can be
structured to protect confidentiality by restricting a party's access to information that is
not relevant to its case and limiting subsequent use of such information, violation of
privacy is one of the strongest arguments that has been raised against consolidation. It is
sometimes difficult to combine the intervention of third parties with the respect of
privacy and trade secrets. A contractor, for example, may not wish to reveal certain
financial data to other parties.
In bi-party arbitration, as there is no third party involved, there is no confidentiality
problem; thus, it should not be open to a party to object, on the grounds of
P 66 confidentiality, to the joinder of two parallel proceedings involving only two parties.
(c) Absence of provisions regarding consolidation
It has been argued that the absence, in the arbitration clause, of provisions regarding the
consolidation of multi-party arbitration should be interpreted as a choice by the parties
for having arbitration limited to the parties tied by the agreements which contain the
arbitration clause. (94) This argument is based on the idea that arbitration is consensual,
and disputes are ruled according to the procedure chosen by the parties. For this reason,
the parties’ consent should prevail over considerations of saving time and money. It has
been sustained that compulsory consolidation without the consent of the parties
involved actually reflects the court's will rather than that of the parties. (95) This
interpretation of the parties’ consent seems, however, rather simplistic, as it does not
take into account the contractual practice and also does not search for the real intention
of the parties.
In practice, parties do not pay much attention to—and, in any case, do not go into great
detail while negotiating—arbitration clauses. They often refer to the model arbitration
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clauses recommended by the major international arbitration institutions, which are
based on the traditional two-party model and do not contemplate the possibility of
multi-party disputes. Accordingly, the absence of consolidation provisions cannot be
interpreted as the parties’ voluntary preference for not having related disputes settled in
one proceeding, but it only means that the parties did not consider the matter. (96)
It is not always correct to interpret the will of the parties exclusively from the wording of
the arbitration clause. It is also important to take into account the intention of the
parties, the reason why they decided to submit disputes to arbitration. An agreement to
arbitrate is based on one fundamental concern—avoiding the delays, formalities and
technical complications of national courts and choosing instead the quick, fair final and
complete solution, of a system better adapted to business reality, which is capable of
handling any disagreement in a businesslike manner, at the lowest possible cost. (97)
However, this does not mean that the parties have given up on national rights and
remedies. If the parties have chosen arbitration in order to bypass the inconveniences of
national courts, on the one hand, on the other, they cannot disregard all aspects of legal
proceedings, as they depend on national courts for enforcement of arbitral agreements
and awards. The argument according to which consolidation violates the parties’ consent
is thus unjustified. It seems rather hard to believe that a solution such as this, which
P 67 contributes to the accomplishment of consistent results by avoiding conflicting
decisions, does not correspond to the intention or to the will of the parties. (98)
2. Difficulties Regarding the Constitution of the Arbitral Tribunal
Consolidation has been held to affect a party's right to appoint an arbitrator enjoying its
confidence. (99) Many arbitration clauses provide for an arbitral tribunal composed of
three arbitrators, each party having the right to choose an arbitrator, with the third
arbitrator chosen either by the first two, by the parties or by the elected arbitration
institution. Consolidation of multi-party arbitration may thus give rise to difficulties, as it
becomes rather impracticable to let each of the parties choose a different arbitrator. It
may become very complicated to increase the number of arbitrators indefinitely in order
to respect each party's desire to appoint an arbitrator. A large number of arbitrators may
not only increase the expenses incurred in the arbitration but also give rise to scheduling
problems, a situation which may seriously affect the effectiveness of the proceedings.
(100) For this reason, in multi-party arbitration, it is often necessary to change the
original provisions regarding the appointment of the arbitral tribunal in order to avoid an
indefinite increase in the number of arbitrators.
Consequently, consolidation may, according to the number of parties, eliminate the right
for each party to choose a different arbitrator, a right which is considered by the French
Cour de Cassation as a fundamental right and by many authors as one of the main
advantages of arbitration. (101)
In fact, the importance of the right for each party to appoint a different arbitrator has
been largely discussed. But regardless of the importance for this right, the difficulty does
not arise in two-party arbitrations concerning multi-contracts as the parties do not, in
principle, lose their right, each to appoint a different arbitrator.
3. Depriving a Party of Judicial Access
In multi-party arbitration, consolidation may affect the substantive rights of a party. The
compulsory intervention of third parties may infringe a party's right to initiate legal
proceedings. By submitting, to the same arbitration, parties which had not concluded
P 68 arbitration agreements directly with each other, consolidation may deprive a party of
judicial access. For example, in a consolidated three-party arbitration (among A, B, C), A
may file a claim against C, with whom A had not entered into an arbitration agreement.
This infringes C’s rights to file legal proceedings against A. (102)
This difficulty does not exist in two-party arbitration. Consolidation does not deprive
parties of judicial access, as an arbitration agreement was concluded directly between
the parties concerned.
4. Unjust Apportionment of Fees
Another objection to consolidation in multi-party arbitration is the apportionment of
fees, as there is no generalized formula in this respect. Sometimes, when there is
consolidation of parallel proceedings, a party may actually be required to pay more than
it would have to pay, had separate proceedings been held. (103)
This problem does not arise in two-party arbitration, as arbitral costs are usually either
assessed equally between the parties or the losing party must pay the costs of the other
party.
5. Enforcement Difficulties
Another point which has been raised against court-ordered consolidation in multi-party
arbitration, and which can also be raised against bi-party arbitration, involves
enforcement difficulties. Although the New York Convention does not expressly forbid the
enforcement of an award rendered by a tribunal in consolidated proceedings, it has been
argued that, in some situations, a party can resist the enforcement of an award which
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embodies court-ordered consolidation of multi-party arbitrations on the ground of
ArticleV (1)(d) of the Convention. (104) This conclusion is based essentially on two ideas:
that an agreement on the place of arbitration is not necessarily an agreement as to the
applicability of the arbitration law of the place of arbitration; and that, in case the
parties have not themselves agreed on the application of the law of a country which
admits consolidation, a modification of the arbitral tribunal caused by court-ordered
consolidation would violate the parties’ agreement on the composition of the tribunal.
(105)
However, another part of the doctrine offers a different opinion about this question and
considers that an award which results from a judicially ordered consolidation of related
arbitrations does not fall under ArticleV (1)(d) of the New York Convention because an
agreement on the place of arbitration implies a choice for the applicability of the
arbitration law of that place. For this reason, if the arbitration law of the place of
P 69 arbitration provides for consolidation, consolidation ordered by a court of that
jurisdiction is likely to prevail over the parties’ agreed method for appointing arbitrators
and conducting arbitral proceedings. (106)
The New York Convention does not impose the recognition of the decision of
consolidation. (107) Accordingly:
“...the judge who will rule on the enforcement of the award will appraise, without being
bound by the decision taken by the judge of the place of arbitration, whether the scope
of the jurisdiction of the arbitral tribunal that has rendered the award is in compliance
with the will of the parties.” (108)
However, in a case where the place of arbitration was not chosen by the parties
themselves, (109) it seems likely that the enforcing judge will consider that the award is
not in compliance with the will of the parties. (110)
Is it desirable to consolidate parallel arbitral proceedings? Is it convenient to
incorporate national joinder rules into the existing practice of international arbitration?
From this analysis of principles, rules, doctrine, case-law and arbitral practice, it can be
concluded that there is no major incompatibility between the rule of joinder and multicontract situations between two parties. Only a formal interpretation of the theory of
consent would lead to the non-application of this procedural rule, which, in the opinion
of this author, perfectly meets the necessities of both international business and contract
law.
Although it is generally agreed that consolidation is desirable, no perfect multi-party
consolidation system has ever been devised. Proposals for consolidation regarding multiparty arbitration have been considered to be unworkable and have not been able to
respond to most of the arguments raised against them. It should be noted, however, that,
in two-party arbitration, consolidation is not only desirable but also practical and
workable. It is thus possible to conclude that the advantages of consolidation outweigh
its disadvantages. Accordingly, consolidation is an alternative that must be seriously
considered by parties, lawyers, arbitrators and arbitration institutions, as well as by
legislators and judges, as a possible solution for the difficulties raised by multi-contract
situations involving two parties only. The rule of joinder, as applied by national courts in
litigation, can be transposed to bi-party arbitration regarding multi-contract situations
since consistent results are just as important in arbitration as they are in litigation. Its
advantages may lead one to the conclusion that consolidation is preferable to the
alternative of holding multiple proceedings, as it eliminates the risk of inconsistent
awards for related disputes.
P 70 The desirability of consolidation of connected arbitrations is significant; non
consolidation may have irreparable and irreversible consequences on the merits. One of
the conclusions reached at the Warsaw Symposium was that justice itself, and not only
the arbitral process, is at stake in the absence of provisions regarding multi-party
arbitration. (111) The purpose of arbitration is not achieved if the award is eventually
reversed or cannot be enforced. Whereas arbitration is meant to settle disputes,
contradicting awards only create additional ones.
Arbitrators, arbitration institutions and national courts should be empowered to carry
out measures which are necessary for rationalizing the proceedings. The principle of
sanctity of contracts should thus be tempered by the requirements of the good
administration of justice. As rightfully observed by Nagla Nassar, who commented on ICC
Award 5294 of 1989: (112)
“...this decision, and others to the same effect, demonstrates a shift toward the
contextual approach. No longer are jurisdiction and applicable law clauses the exclusive
domain of the parties’ will; they also must be understood and applied in light of the
parties’ relationship as a whole.” (113)
If, on the one hand, it is generally agreed that consolidation is desirable, on the other
hand, there are some doubts about the best way to implement this principle. The
following Section will examine how multi-contract situations are dealt with in
international arbitration practice.
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Part Two: Multi-Contracts in International Arbitration Practice
Part of the French doctrine considers that it is inadmissible to have different decisions
for interrelated disputes (114) and thus, theoretically, the best way to avoid this kind of
problem is for the claimant to introduce a single arbitration and to submit all disputes to
a single arbitral tribunal. In the case where more than one arbitration has been
introduced, the ideal solution is to put together all the disputes subject to the different
arbitrations, by consolidating them before a single panel. (115) This can be called
consolidation stricto sensu.
Judicial, institutional and conventional consolidation of interrelated arbitral proceedings
is, however, only one possible answer to the questions raised by complex arbitrations.
There are also other ways of dealing with parallel arbitral proceedings in order to avoid
inconsistent results. Actually, there are two other possibilities, which can be called de
facto consolidation: whenever the constitution of a single arbitral panel is not possible,
P 71 some authors recommend the designation of the same arbitrator or arbitrators in the
parallel proceedings (116) or some kind of co-ordination between the different arbitral
tribunals which deal with the related disputes. (117)
Imagine, for example, a situation where A and B—no third party is involved—have
concluded two contracts concerning two different aspects of the realization of the same
transaction, each contract containing its own arbitration clause. As a consequence of the
difficulties arising out of the performance of the two agreements, A, as a claimant,
requests two separate arbitrations, each on the basis of each of the arbitration clauses. B
contests these double proceedings on the basis of the interrelation between the
agreements. According to B, in spite of the presence of several agreements, there is only
one single contractual relationship between the parties, and for this reason all disputes
arising thereof should be settled before a single arbitral tribunal. Is it possible to
consolidate the two parallel proceedings?
An analysis of different national and institutional rules reveals that, whenever parties
expressly provide for or preclude consolidation in their arbitration clauses, there is no
problem regarding the joinder of parallel proceedings (SectionI). Judges, arbitrators and
arbitration institutions will abide by an express agreement on consolidation between the
parties. The difficulty persists only over the question of determining whether
consolidation may be ordered when there is no express provision on this issue. In the
absence of express agreement, consolidation will depend on the arbitration institution
chosen by the parties, if any (SectionII). (118) However, as most arbitration institutions
have not yet found an efficient solution in this regard, arbitrators are confronted with the
difficulties of non-consolidated proceedings. As arbitrators do not have the power to
consolidate in the absence of the parties’ consent, they have to find alternative solutions
to consolidation. In practice, arbitrators usually deal with multi-contract situations by
ruling on the scope of their jurisdiction over disputes arising out of related contracts
(SectionIII).
A study is undertaken below of the solutions given by these three categories of actors in
international arbitration, to the problems of parallel arbitral proceedings regarding
complex contractual relationships. This analysis includes not only consolidation stricto
sensu, i.e. joinder, but also de facto consolidation, meaning other solutions which may be
used as substitutes or equivalents to consolidation.
I. Consolidation Agreed by the Parties
The parties play a major role in implementing consolidation, as it is they who sign the
P 72 arbitration clauses, and as the text of the arbitration clause depends on them. It is up
to the parties to include provisions regarding the constitution of a single arbitral tribunal
or the consolidation of related proceedings. However, if the parties have not provided for
this in the arbitration clause, an alternative solution for a party desiring a joint
appreciation of the issues is for that party to designate the same arbitrator in the
parallel proceedings.
A. The parties’ role in drafting the arbitration clause
In order to avoid inconsistent solutions, it is desirable that the parties expressly provide,
in the arbitration clauses of the interrelated agreements, for the same arbitral tribunal to
rule on the interrelated disputes. In this respect, it is convenient for the first agreement
to set forth that the parties have to introduce, in the subsequent agreements, a clause
obliging them to participate in the arbitration regarding the first agreement. (119) It is
important to set up a contractual mechanism which would ensure that, once a party has
requested arbitration, any and all disputes regarding the multi-contract situation at
stake will be submitted to that arbitration. This will avoid a multi-proceeding arbitration,
as the parties are barred from initiating additional arbitrations.
If the parties have decided not to provide for the same arbitral tribunal to rule on the
interrelated disputes, another solution is to provide for joinder of the separate arbitral
proceedings in the arbitration agreement. This would contribute to overcoming all the
objections raised against consolidation. Consolidation by consent is of course the ideal
solution for complex arbitrations. Some authors consider that consent is the only basis
for consolidation in arbitration and that joinder can only work if it is based on the
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express will of the parties. (120) As has been mentioned:
“...the scarcity and the aleatory character of the compulsory consolidation proceedings
lead to the conclusion that the insertion by the parties of appropriate clauses at the
moment of the drafting of their agreements remains—and will remain—the privileged way
of solving the difficulties of multi-party arbitration.” (121)
It is true, however, that this literature deals with multi-party arbitration. Therefore, a
strict interpretation of the parties’ consent principle does not necessarily apply to twoparty arbitration.
Other scholars, nonetheless, consider that the reasoning according to which consent is
the only basis for consolidation does not take into account the actual difficulties
P 73 involved in drafting a consolidation clause, (122) namely:
(i)
(ii)
the difficulty of drafting model consolidation clauses of general applicability;
the fact that arbitral clauses are rarely negotiated, as parties tend to have little
knowledge about joinder;
(iii) the fact that parties often have different bargaining powers; usually one of the
parties dictates many of the terms of the contract. (123)
Accordingly, it seems simpler to consolidate whenever the parties draw up a
consolidation clause, refer to the same arbitration institution and provide for the same
method of designating arbitrators.
In the absence of national and institutional rules regarding consolidation, parties should
remain very attentive to deciding, at the moment of the drafting of their agreements,
whether or not they wish to have consolidation of related disputes. (124) Although it is not
always possible to foresee what disputes may arise between the parties at the moment of
the signing of the agreements, it is often quite predictable that disputes are likely to
involve at least two of the agreements concluded by the parties, since a dispute
regarding one of the agreements may affect the performance of the second one and
therefore give rise to a second dispute. Whenever the relationship involves a multiplicity
of contracts, the parties and their counsels should presume that multi-contract disputes
are common and should consequently consider including a consolidation clause.
Reference to consolidation in the arbitration clause is very important, (125) especially
because, after a dispute has arisen, the parties are less likely to reach any agreement, as
“strategic considerations may thus influence the decision of whether to consent to
consolidation when the original agreement did not so require.” (126)
In the absence of specific provisions in the arbitration clause, it is nevertheless possible
to obtain de facto consolidation.
B. Designating the same arbitrators in parallel proceedings
If there is no express provision for consolidation under the existing arbitration
agreements, one has to keep in mind that there are several legal and practical
opportunities available to the parties. The lack of provisions for consolidation of
arbitration proceedings should not cause a party that is searching for the benefits of
consolidated arbitration to give up all hope. The facts of a specific case play a major role
P 74 in convincing the court about a party's implicit agreement to consolidation:
“...depending on the facts of a specific case, one should not overlook the possible
argument that the recalcitrant party has implicitly consented to joint arbitration.” (127)
Harmonizing parallel proceedings, namely through the choice of the same arbitrators, is
very practical and may allow a common taking of evidence or even a consolidation of the
different proceedings. (128) The question of determining whether a party is allowed to
appoint the same arbitrator, in a series of connected cases regarding the same question
or similar questions, was analysed by Judge Bola Ajibola, (129) according to whom the
appointment of the same arbitrator in parallel multi-party arbitrations is important for
two reasons. (130) Firstly, whenever the issues at stake are either linked or identical in
substance, it seems logical that an arbitrator who is familiar with the facts may act
quickly, especially regarding questions of procedure or administration of evidence. For
this author, celerity and efficiency are among the major concerns of a party who has
agreed to arbitration. (131) Secondly, a common arbitrator will ensure the coherence
between the conclusion reached by the different panels. Although arbitrators are not tied
to a previous award, whenever cases are identical in terms of merits, it seems reasonable
to expect that the different awards be based on the same grounds (132) and that, when
the solution of a dispute submitted to a panel of arbitrators depends on the solution
given by another arbitral tribunal, the former arbitrators should consider themselves as
bound by the latter's decision.
Where the parties do not reach an agreement on consolidation or if they do not designate
the same arbitrators in the parallel proceedings, it should be possible to obtain either
consolidation or an equivalent solution, by the intervention of an arbitration institution.
In fact, as stated by V.V. Veeder:
“...the problems of multi-party disputes are too many and complex to be left entirely to
the continuous ad hoc consent of the parties and the arbitrators; and...a mixed
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consensual and statutory solution could provide the best of both worlds.” (133)
II. Consolidation and Arbitration Institutions
It has been argued that only institutional intervention may remedy a lack of agreement
between the parties. (134) In this respect, arbitration institutions have a fundamental
role to play, which includes elaborating standard clauses and arbitral rules, designating
arbitrators in case of disagreement between the parties, and making the procedure
P 75 efficient by:
– assuring a common taking of evidence;
— harmonizing the parallel proceedings; and
– ensuring that the different awards are rendered on the same date. (135)
Consolidation greatly reduces the risk of factual errors, as in consolidated proceedings
the arbitrators are likely to reach a more complete understanding of the facts and issues
in disputes. Based on this idea, arbitration institutions should thus play a very active
role, encouraging consolidation in appropriate cases. Surprisingly enough, the procedural
rules of most arbitration institutions do not set forth a consolidation system entitling
them to order compulsory consolidation in the presence of interrelated issues. Whereas
the UNCITRAL and AAA Rules do not contain any provision regarding consolidation, in the
Arbitration Rules of the London Court of International Arbitration as well as the ICC,
consolidation has been expressly provided for.
Article 13.1(c) of the LCIA Arbitration Rules only permits third parties to be joined in the
proceedings with their consent, (136) but there is no provision regarding joinder of
related proceedings. A very interesting provision regarding multiple requests for
arbitration is contained in Article 16.1 of the Arbitration Rules of the Chamber of
Commerce and Industry of Geneva CCIG), which reads as follows: (*)
Under ICC arbitration, consolidation is possible, even if it is apparently not usually
practised. Although the ICC has not, to date, elaborated any model clause dealing
specifically with the question of consolidation in bilateral multi-contract situations, the
ICC International Court of Arbitration can contribute not only to the realization of
consolidation stricto sensu, but also to the obtention of de facto consolidation. However,
one may wonder whether these two possible interventions by the ICC Court of Arbitration
are sufficient to ensure its role, which is to preserve the good administration of justice.
A. Joinder under icc rules
In ICC arbitration, parallel proceedings can be grouped into a single arbitration before
one tribunal whenever stipulated in the arbitration clause or whenever agreed by the
parties at a later stage. However, joinder can also be obtained, in spite of a disagreement
P 76 between the parties, as long as the requirements set forth by Article 13 of AppendixII to
the ICC Court of Arbitration's Internal Rules are met. According to this text, entitled
“Joinder of claims in arbitration proceedings”:
“...when a party presents a Request for Arbitration in connection with a legal relationship
already submitted to arbitration proceedings by the same parties and pending before
the Court of Arbitration, the Court may decide to include that claim in the existing
proceedings, subject to the provisions of Article 16 of the ICC Rules of Arbitration.”
Joinder can thus be obtained whenever certain requirements regarding the merits and
the procedure are met.
1. Conditions Regarding the Merits
As explained by the Working Party on Multi-Party Arbitration established by the ICC
Commission on International Arbitration, the ICC International Court of Arbitration shall
join the proceedings whenever the conditions set forth by Article 13 are met, that is,
identity of the parties and a single legal relationship. (137) Although the requirement
regarding identity of the parties does not present any major problem in the context of
two-party arbitration, difficulties may arise as to:
– the interpretation of the notion of “a legal relationship”;
– whether the application of Article 13 requires the parties’ consent to
consolidation; and
– the scope of the parties’ consent.
In these three cases, the interpretation of the real intent of the parties is of capital
importance.
(a) The concept of “a legal relationship”
Does the condition concerning “a legal relationship” mean one single formal contract, or
does it take into account the transaction (negotium) between the parties, irrespective of
the multiplicity of the instruments (instrumenta), i.e. the existence of various formal
contractual documents? As demonstrated above, case-law, doctrine and arbitral practice
on interrelated contracts lead one to believe that “a legal relationship” cannot be
confined to a formal interpretation of such contracts. Accordingly, joinder may be
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ordered by the ICC Court in spite of the multiplicity of contracts, whenever there is
interrelation. (138)
(b) The parties’ consent to joinder
In theory, joinder can be ordered even if not all the parties agree, since a unanimous
P 77 agreement is not a requirement for joinder:
“Provided the conditions of Article 13 of the International Rules are fulfilled, then in
theory the consent of all the parties is not necessary.” (139)
Joinder is an administrative measure which can be ordered by the ICC International Court
of Arbitration when both the parties and the legal relationship are identical, irrespective
of the parties’ consent. Article 13 may be compared to the court-ordered joinder of civil
actions, namely to the provision, mentioned above, of Article 367 of the French New Code
of Civil Procedure—according to which joinder may be ordered by a court ex officio, and
there is no possible appeal against this decision.
However, although it has powers to consolidate parallel proceedings, in practice the
International Court of Arbitration usually seems to be very reluctant to order the joinder
of arbitral proceedings. According to the Working Party, the Court does not take the
initiative of joining the parallel proceedings unless it is asked to do so by a party.
Practically, consolidation is ordered only when there is consent. (140) This attitude on the
part of the Court does not seem to give a satisfactory solution to the hypothetical
problem which may arise if only one of the parties wishes to have related arbitrations—
regarding disputes arising out of the same legal relationship—consolidated into a single
panel. One may wonder whether, and to what extent, conditioning consolidation to
consent does not open the door to abuse and to the risk of denial of justice. After all, it
should be considered that by submitting their disputes to arbitration under the ICC
Rules, the parties have agreed beforehand to joinder as set forth by Article 13. (141) What
happens if the ICC Court of Arbitration does not order the joinder requested by one of the
parties? Where the Court's refusal, regarding the joinder, leads to inconsistent awards,
(142) it would seem justifiable to consider that the party who had requested
consolidation and warned the Court of the risk of contradicting awards would be entitled
to sue the ICC before the competent national courts on the grounds of its contractual duty
to ensure that the parties have a fair trial, (143) in order to claim damages for the
prejudice suffered, if any.
In order to determine whether there is consent to joinder, it is worth analysing the intent
of the parties at the moment of the conclusion of their contractual relationship. In this
respect, it is convenient to determine the scope of the parties’ consent.
(c) Determination of the scope of the parties’ consent
The ICC Court of Arbitration should be able to find an answer to the question of
determining whether contracts are interrelated by searching for the intent of the parties
P 78
at the moment of their conclusion. This can be done by analysing the facts, the parties’
contractual practice and their behaviour in the performance of their obligations. An
appraisal of the contractual form adopted by the parties, as well as that of the
arbitration clauses contained in the different instruments, may also provide some
indication as to the scope of the parties’ consent to joinder. In this respect, the following
should be analysed:
(i)
a general (or cover, basic, master, main, head, etc.) agreement accompanied by
ancillary agreements;
(ii) a framework agreement followed by successive application agreements;
(iii) successive or simultaneous contracts, concluded between the same parties,
contributing to the performance of the same operation, in the absence of a general
or a framework agreement.
(i) A general agreement with ancillary agreements
Major international operations give rise to the conclusion, between two parties, of a
general (or cover, main, master, basic, head, etc.) agreement accompanied by a
multiplicity of ancillary agreements, for instance, a sales agreement, a financing
agreement and a services agreement, as already mentioned. The presence of a general
agreement in a multi-contract situation may be an indication of the parties’ intention to
have the different contracts treated as a single agreement. It may be that the general
agreement as well as the ancillary agreements contain an arbitration clause. Two
situations should be distinguished here: when all arbitration clauses are identical; and
when the arbitration clauses are different.
The arbitration clauses are identical
Even when the parties have textually reproduced the same arbitration clause in each of
the contracts involved in the performance of the same operation, a difficulty may occur.
The parties may disagree over the question of whether a single arbitral tribunal shall be
constituted in order to settle all disputes which may arise from these contracts, or
whether the number of arbitral tribunals shall correspond to the number of arbitral
clauses. As far as multi-contract situations involving two parties are concerned, it seems
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reasonable that the intention of the parties was to consider the different agreements as
one unified and indivisible transaction, and this is the reason why the arbitration clause
was repeated, in identical terms, in each one of the agreements. This is the position
adopted by doctrine. Jacques El-Hakim, commenting on independent agreements having
the same object and identical arbitration clauses, is of the opinion that “in spite of the
independence of the various agreements, the unity of object and of the arbitration clause
P 79
might lead to submitting them to a single arbitration”. (144) This view is also shared by
Ph. Fouchard, E. Gaillard, and B. Goldman, who think that:
“...as a general rule, one may believe that by reproducing in identical terms an
arbitration clause in different interrelated contracts, the parties intended to submit the
whole operation to a single arbitral tribunal...” (145)
Similar reasoning can be found in ICC Arbitral Award No. 5989 of 1989. (146) Actually, this
case did not involve the application of Article 13 by the ICC Court of Arbitration, but the
recognition by an arbitral tribunal of its jurisdiction over a connected agreement. The
arbitrators’ reasoning could be adopted by the ICC Court of Arbitration: the repetition of
an identical arbitral clause in different agreements should be interpreted as the parties’
clear intent to avoid the separation of disputes arising simultaneously from two or more
of the different contracts, and therefore the parties’ will to conduct unified arbitral
proceedings relating to these disputes. Nothing could be clearer from the language and
spirit of the agreements. One may consider that, by doing so, the parties wanted to make
sure that any dispute arising out of different agreements would be settled
simultaneously. If the arbitrators considered that they have jurisdiction over connected
agreements, there is no reason why the Court of Arbitration should not admit, ex officio or
if it is required to do so, the interrelation between the various contracts and consolidate
the parallel proceedings under the same circumstances.
Accordingly, whenever all the arbitration clauses are identical in terms of contents—in
spite of differences regarding their wording—there is no room for doubt; consolidation is
possible since it seems to be in compliance with the intention of the parties.
This conclusion can also be applied when only the general agreement contains an
arbitration clause, whereas the ancillary agreements do not, (147) and when the claimant
requests two parallel arbitrations, each on the basis of one of the ancillary agreements.
P 80
In this case, the Court may consolidate the parallel proceedings joinder is in
compliance with the intent of the parties. The claimant's double proceeding strategy
does not seem to be justified. It cannot be seriously sustained that the ancillary
agreements have an independent existence from each other. By introducing two parallel
arbitrations on the basis of the same arbitration clause, the one contained in the general
agreement, (148) the claimant has admitted not only the link between the ancillary
agreements and the general agreement but also the unity of the operation.
If the parties had intended to have disputes arising out of the different ancillary
agreements treated separately, what possible logic could there be in stipulating an
arbitration clause in the general agreement? What kind of dispute could then fall under
the scope of the general agreement's arbitration clause? If the parties’ intent was to have
disputes arising out of the different ancillary agreements treated separately, they would
probably not have concluded a general agreement.
The duty of the Court is to look for the intent of the parties, according to objective
elements. The presence of an arbitration clause in the general agreement is indeed an
objective element which should be deemed as demonstrating the intention of having the
entire transaction treated as a whole. It seems logical enough that the ancillary
agreements should be interpreted according to the general agreement. In practice,
whenever there is a dispute regarding the business operation, it usually concerns the
ancillary agreements and only indirectly involves the general agreement. A general
agreement is not self-sufficient, since it only outlines the main terms of the parties’
obligations, which are better defined in the ancillary agreements. Therefore, there seems
to be consent to consolidation.
According to Fouchard, Gaillard and Goldman, whenever a main contract (contrat de base)
contains an arbitration clause to which all the other contracts involved in the same
operation refer, this situation:
“...does not present any difficulty. The intention of the parties is clear: they have chosen
to submit all disputes which may arise from the contractual whole (ensemble contractuel)
to arbitration and they have chosen to submit all disputes to one single arbitral tribunal,
which shall be constituted according to the stipulations contained in the contract which
provides the basis for the whole operation.” (149)
The arbitration clauses are different
If the arbitration clauses have different contents, consolidation of the parallel
proceedings may lead to some difficulties. In some cases, different agreements
concluded in the context of the same operation may contain arbitration clauses naming
different arbitration institutions, (150) or to a different seat of arbitration, or to a
different number of arbitrators, or to the same arbitration institution but to different
P 81 seats of arbitration. (151) In these situations, the intent of the parties has been clearly
expressed in each of the agreements. The insertion of different arbitration clauses means
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that, for each specific agreement, the parties intended to have the dispute settled in a
different way, and the declared intent of the parties should thus receive application. If
the parties have selected different arbitral instances to settle disputes arising out of
different contracts:
“...they rejected the possibility of a consolidation externally imposed on them by a court
of law or otherwise since they had in mind having disputes decided, no matter how
closely interconnected, by different panels irrespective of any risk of incompatible
decisions.” (152)
Although it is generally accepted that the best solution to avoid contradicting decisions
would be either to submit disputes arising out of these agreements to the same arbitral
tribunal or to consolidate simultaneous arbitrations regarding this set of contracts, in the
absence of an agreement between the parties, the arbitration institution does not have
the power to take any step in this regard. (153) In some legal systems, however,
consolidation can be ordered in the absence of an agreement between the parties even
when the arbitral instances chosen by the parties in the various agreements are different.
(154)
(ii) A framework agreement with successive application agreements
Parties often organize their business relationships on the basis of a framework
agreement, which defines the main elements of their transaction without entering into
details of the concrete terms. A framework agreement is an agreement which can be
defined as follows: the performance of its object (an object which has already been
agreed by the parties) involves the conclusion of application agreements which are
determined in the framework agreement. (155) The essential obligation undertaken in the
framework agreement is the obligation to conclude application agreements. In practice,
whereas the framework agreement is usually a long-term, written agreement, application
contracts are usually concluded on a yearly, semestrial or monthly basis through a simple
exchange of faxes or telexes, where parties agree only certain points. (156)
The presence of a framework agreement is an indication of the unity of the operation and
of the parties’ intent to have all disputes arising therein treated as a whole. However,
here again, different situations must be contemplated: the framework agreement and the
P 82 application agreements contain identical arbitration clauses; or the arbitration
clauses contained in the application agreements are different from that in the framework
agreement.
The arbitration clauses are identical
If all the arbitration clauses are identical, consolidation is possible for the reasons
described above regarding general agreements accompanied by ancillary agreements.
(157)
Consolidation is also possible if only the framework agreement contains an arbitration
clause, not the application agreements, and if the claimant requests two parallel
arbitrations, each on the basis of one of the application agreements. (158) By introducing
two parallel arbitrations on the basis of the same arbitration clause—the arbitration
clause contained in the framework agreement (159) —the claimant has admitted the
interrelation between the different agreements and the indivisibility of the operation.
Consequently, there can be consolidation of parallel proceedings, especially if the
dispute regarding an application agreement has triggered a dispute regarding a later
application agreement. If, for instance, there is a dispute regarding the price for a certain
year, this dispute may affect the price in the following years as part of a chain reaction,
particularly when the price is determined in relation to the previous year's price. For this
reason, consolidation should be possible; by virtue of the link between the framework
agreement and the successive application agreements, all disputes could then be
treated as a whole, by the same arbitrators.
The arbitration clauses are different
If the arbitration clauses have different contents, consolidation of the parallel
proceedings is difficult because it does not seem to correspond to the intent of the
parties. It should be taken into account that, if a later application agreement contains an
arbitration clause which is different from the one contained either in the framework
agreement or in the previous application agreements, the stipulations contained in the
new arbitration clause should prevail over the others since it can be deduced that the
parties have agreed to modify the original arbitration agreement. According to eminent
P 83 authors:
“...this new choice excludes, by itself, that the previous clause be considered as implicitly
renewed. Whenever the latest agreement has the same object as the previous one but
contains a different arbitration clause, one can deduct that the parties have agreed to
modify the arbitration agreement.” (160)
Judges in France have interpreted the intent of the parties in the same way. (161)
(iii) Distinct agreements contributing to the performance of the same economical
operation, without a general or a framework agreement
If the arbitration clauses are identical, it should be considered that the intent of the
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parties was to consolidate the dispute. In ICC Award No. 6149 of 1990, dealing with three
sales contracts containing identical arbitration clauses, the arbitrators reached the
conclusion that:
“It must be assumed that it was the tacit intention of the parties to invest the arbitral
tribunal with jurisdiction over all disputes possibly deriving from, or being related to,
their three sales contracts.” (162)
The Court could make the same analysis in order to consolidate parallel proceedings.
This decision, which was based on the interpretation of the three arbitration agreements
and on the tacit intention of the parties, took into account the consequences of a
decision to the contrary. The arbitrators considered that, if it were permissible for the
parties to be engaged in different proceedings for different issues, a conflict between the
different decisions might occur. According to the arbitrators:
“such conflicts would be detrimental to the interests of the parties. The arbitral tribunal
must therefore assume that the parties wanted to avoid such conflicts. Consequently
their arbitration agreements must be construed in such a way as to exclude a concurrent
jurisdiction of the arbitral tribunal and a State court on matters resulting from one and
the same contracts. The present dispute therefore is covered by the arbitration
agreements.” (163) This reasoning can be transposed to the ICC Court of Arbitration, which
should consolidate parallel proceedings under similar circumstances.
If the arbitration clauses are different, consolidation does not seem possible a priori for
the same reasons described above. (164)
2. Procedural Conditions
Joinder also requires compliance with certain procedural conditions. A particular aspect
only
to successive proceedings or also to simultaneous proceedings. Another procedural
question to be considered is the moment of the joinder.
P 84 which shall be taken into consideration is to determine whether Article 13 applies
(a) Scope of Article 13 of the Icc Internal Rules
Does Article 13 apply only to successive proceedings, or is it also applicable to requests
for arbitration filed simultaneously on the basis of two, or more different—but
interrelated—agreements between the same parties? In view of the general spirit of the
rule of joinder, it may be concluded that, although Article 13 only refers to the
consolidation of successive proceedings, this rule should also apply to concomitant
proceedings. If it is possible to include a claim “in connection with a legal relationship
already submitted to arbitration proceedings” in the existing proceedings, there is no
logical reason not to join two related requests for arbitration introduced simultaneously
between the same parties.
(b) Moment of the joinder
Under ICC Rules, joinder seems possible only prior to signing the Terms of Reference.
However, after this stage of the arbitral process, it is still possible, as long as the
requirement set forth by Article 16 of the ICC Rules are met; the parties must agree to
amend the Terms of Reference, in order to include the claims and counter-claims of the
parallel proceedings which previously did not fall within the scope determined by the
Terms of Reference. (165) According to Article 16, any new issue shall be included in an
addendum which shall be signed by the parties and the arbitrators. (166)
One may wonder whether it is reasonable to consider the signing of the Terms of
Reference as the deadline for joinder in the absence of the parties’ consent. It is
questionable whether such a sacrosanct value should be granted to such a document,
especially in view of the rigidity of this system. Accordingly, the Court should be able to
join two parallel arbitral proceedings which were introduced successively, and a fortiori
simultaneously, involving the same parties and the same legal relationship, as long as
the case has not gone beyond the pleading state. However, in the present state of the ICC
Rules, this does not seem practically possible.
The constitution of the second arbitral tribunal may also be a source of difficulty for
obtaining joinder. Consolidation usually takes place before the constitution of the second
arbitral tribunal because, if the parties constituted arbitral tribunals compose of
different arbitrators for the two cases, joinder at the Court's initiative becomes almost
P 85 impossible, even if the conditions of Article 13 are met. (167)
Consolidation is not the only remedy to avoid conflicting awards for related issues. The
risk of incoherent awards can also be reduced by de facto consolidation.
B. De Factor consolidation under icc rules
De facto consolidation can be obtained either by the appointment of the same sole
arbitrator, co-arbitrators or chairman in the parallel proceedings, or by co-ordinating the
parallel proceedings. According to the Working Party on Multi-Party Arbitration, the ICC
Court of Arbitration has often confirmed the appointment by a party of an arbitrator who
is also a member of a parallel arbitral panel (168) and has often designated the same
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arbitrators in related parallel proceedings, especially when the parties are not opposed
to it, in order to ensure the good administration of justice and the efficiency of the
proceedings. (169)
Whenever the parties are not opposed to the appointment of the same arbitrators, no
major difficulty arises. But what happens when the parties have differing opinions as to
the participation of the same arbitrator or arbitrators in the parallel proceedings? Would
the ICC Court of Arbitration be justified in refusing the nomination of the same arbitrator
or arbitrators in parallel, related proceedings on the sole grounds of avoiding the risk
that the common arbitrator would be influenced by the related proceedings? Can an
arbitrator's eventual lack of independence be anticipated? Could an arbitrator be
challenged on the sole grounds of an eventual lack of independence?
According to doctrine, this depends on determining whether the parallel arbitrations are
simultaneous or successive. In successive arbitrations, such a refusal may be founded if
an arbitrator has a past link with a party or when he has expressed a prior opinion on a
similar question. (170) However, in situations involving simultaneous cases, that is
whenever the parallel arbitrations were introduced simultaneously, the solution would
be different. In such a case the Court would not always be justified in refusing the
nomination of the same arbitrator. (171) In fact, no general rule can be applied; the
solution must be given on a case-by-case basis, according to the facts and circumstances.
(172) Some authors consider that two different situations should be distinguished: coarbitrators, on the one hand and, on the other, the sole arbitrator and the chairman.
Whereas the nomination of the same co-arbitrator in parallel arbitrations presents no
specific problem in terms of violation of the principle of independence, the appointment
of the same chairman and the same sole arbitrator in related proceedings may present a
risk in this respect. (173)
P 86 Bearing this in mind, the following hypothesis, based on a real experience, can be
envisaged. A, the claimant, decides to initiate two simultaneous arbitral proceedings
against B, the defendant, each regarding a dispute relating to a different contract, but
the two contracts, containing identical arbitration clauses, are part of the same economic
operation, under a general agreement. Whereas A designates a different co-arbitrator for
the two proceedings, B nominates the same co-arbitrator in the two proceedings and
requests the ICC Court to appoint the same chairman for the two panels. However, A
challenges B’s designation of the same arbitrator and contests its request regarding the
appointment of the same chairman. To what extent are A’s requests justified? Should the
ICC International Court of Arbitration confirm or reject the appointment by the defendant
of a co-arbitrator who is also a member of a parallel arbitral panel, in case of challenge
by the claimant? Should it confirm or reject the defendant's request for the appointment
of the same chairman or sole arbitrator in the parallel cases, in case of challenge by the
claimant?
These questions will be analysed in the light of the procedural strategies which could
guide the parties and in respect of the major procedural principles. One may wonder
whether challenging the appointment of an arbitrator on the sole grounds of his
participation in a parallel case, submitted to the same arbitration institution between
the same two parties—and no one else—and regarding interrelated agreements, would be
contrary to the principles of due process, equality of parties and good faith.
1. The Principle of Due Process
The principle of due process of law, one of the fundamental principles of international
arbitration, means that each party shall be allowed to present arguments on every
aspect of the case in dispute—this includes both questions of fact and questions of law—
and that the arbitrators shall base any decision they render upon the submissions made
in the case before them which both parties have had the opportunity to contest and
argue. (174)
Undoubtedly, parties to an international arbitration are entitled to due process of law,
but such principle of due process, like any other fundamental principle of law, should not
be read or applied unilaterally. In a judgment rendered by the Paris Court of Appeal, (175)
it was firmly stated that, as a general rule, the principle of due process is not violated
when the same arbitrator participates in two parallel proceedings. (176) Although this
judgment deals with a situation where there were five parties and four separate contracts
(two Loan Agreements and two letters guarantee issued in order to secure the loans), this
rule should apply a fortiori where the arbitral proceedings involve only two parties linked
P 87 in one single transaction under a general agreement, as in the hypothesis envisaged
above. Accordingly, an arbitrator's participation in two parallel cases is not by itself
contrary to the principle of due process.
The solution would be different if an arbitrator participating in two parallel and linked
proceedings are biased. Whereas bias may be grounds for challenge, a challenge based
on a party's subjective allegation on bias or of an eventual lack of independence would
not seem to be justified. The mere participation of an arbitrator in two parallel and
closely connected arbitral proceedings does not make such arbitrator incur the reproach
of being biased in the second case. An arbitrator's participation in the first case, and the
fact that he becomes acquainted with facts, of which his fellow arbitrators in the second
case are not aware, does not necessarily preclude him from deciding a case based only
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on the evidence, arguments and applicable law in that case.
If the arbitrator's independence, impartiality or expertise are not questioned, there
seems to be no violation of the principle of due process. Actually, it is generally accepted
that a judge can hear a dispute for a second time without thereby violating the right to an
impartial tribunal. (177) According to doctrine, this “is a strong argument in favour of
allowing an arbitrator to serve on two panels which are called to settle disputes based on
similar facts”. (178) As it has been brought to light for multi-party arbitration:
“...as a general rule, the impartiality of an arbitrator should not be doubted because of
the fact that he is called to decide a dispute based on the same facts as those on which
he was previously called to arbitrate as a member of a different arbitral tribunal.” (179)
The source of the bias is not participation but rather his possible partiality. (180) Such
was the position of the President of the Paris Tribunal de Grande Instance sitting in
Chambers and deciding in two successive multi-party arbitrations. (181) Since such is the
rule applicable to two successive multi-party arbitrations, it should a fortiori apply to
two successive or simultaneous arbitrations involving the same two parties and relating
to the same transaction.
An allegation of bias needs to be proved. It is up to the party willing to challenge the
arbitrator appointed by the other party to bring evidence of such bias; a party cannot
limit itself to raising a hypothetical risk of bias. As has been pointed out, “the burden is
on the challenger to demonstrate that real bias does in fact exist”. (182) It is well
P 88 established that the grounds for a challenge are of fundamental importance in
appreciating whether such a request should be refused or sustained. (183) The arbitration
institution should thus analyse very carefully the criticisms put forward by each party
against the propositions made by the other party. It seems doubtful that the Court of
Arbitration would sustain a challenge based on the sole grounds of the arbitrator's
participation in parallel proceedings, unless it feels that the claims of the challenger,
even if somewhat subjective, are bona fide. However, the Court will not accept such a
challenge if it considers that the challenger's intentions are rather male fide, that is the
challenge seems unreasonable or made to cause delay. (184) Since the purpose of
consolidation (stricto sensu and de facto) is to provide a more accurate picture of the
dispute, the following are some examples of what could be considered as a mala fide
behaviour:
– refusing to constitute a single arbitral tribunal;
– challenging the arbitrator that a party was forced to appoint in the second
arbitral proceeding as a consequence of the other party's refusal to constitute one
single arbitral tribunal;
– appointing different arbitrators for the parallel proceedings and requesting the
arbitration institution to appoint different chairmen for the two arbitral panels.
After all, if the claimant had appointed the same arbitrator in the two arbitral
proceedings, the risk of bias would be considerably reduced, if not excluded.
In addition, the claimant could not, on the one hand, contend that there are two
“separate” and “unrelated” disputes arising out of two “separate agreements” and, on the
other hand, sustain that the participation of the same arbitrator in such two “unrelated”
disputes could present a risk of bias. If the disputes are really unrelated there is logically
no risk of bias. (185) Such an attitude could be considered as contrary to the principles of
good faith and of estoppel (venire contra factum proprium). (186)
It would be somehow contradictory for the claimant to contend that there could be a risk
of bias where it not only does nothing to mitigate this risk but moreover is responsible for
the consultation of the second arbitral tribunal. It should be considered that a good and
reasonable remedy to such a risk would have been for the claimant to appoint, in the
second case, the same arbitrator as in the first case; but one may understand that such a
choice would not meet its purposes and would not serve its procedural strategy, which is
to have two different arbitrations.
In some cases, the Court of Arbitration could be inclined to conclude that the claimants
who contest the designation made by the defendants solely on the grounds of their
P 89 previous participation in the awards, regarding related cases, are abusing their rights.
For President Pierre Bellet, the absence of precision on the part of the parties who
challenge an arbitrator represent an abuse of their rights. (187)
The freedom of the parties to select and appoint an arbitrator of their choice is another
fundamental principle of international arbitration. (188) The participation of an
arbitrator in two parallel and linked arbitral proceedings is not forbidden, neither by
international conventions, nor by national laws or institutional rules of arbitration. The
ICC Rules do not prohibit such a participation. Thus, in challenging an arbitrator, the
claimant can be considered as willing to prevent the defendant from appointing an
arbitrator of its choice, and thus to prevent the defendant from exercising its right to
appoint the same arbitrator in two parallel and linked arbitral proceedings, which the
claimant may be attempting to separate artificially. The claimant should thus be
considered as abusing the arbitral process in so doing, since, in entering into connected
agreements, the legitimate expectation of the parties seems to have been to submit their
disputes to one single arbitral tribunal.
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The appointment of the same arbitrators in the two cases is sometimes necessary in
order to ensure a proper administration of justice as well as to avoid conflicting decisions
and delays. It is well-established that the designation of a common arbitrator is the best
solution when there is no agreement between the parties concerning joinder. (189)
The appointment of the same chairman or the same sole arbitrator in the parallel
arbitral tribunals can prevent the arbitrators from basing their award upon submissions
which neither party would have the opportunity to contest and argue. Such a de facto
consolidation was admitted by the London Court of Appeal in the Abu Dhabi Gas
Liquefaction Co. Ltd. case, and is generally recommended by prominent scholar
authorities. (190)
2. The Principle of Equality
Could it be justifiable to consider that the appointment of the same arbitrator in two
cases would violate the principle of equality, as that arbitrator would be acquainted with
facts and arguments to which the other members of the arbitral tribunal would not be
privy? Here also, a negative answer would seem to be reasonable.
The principle of equality between parties is closely related to the principle of due
process; however, compliance with the latter does not necessarily result in a respect of
P 90 the former. (191) French courts require that all parties have equal rights regarding the
designation of arbitrators (192) and the parties’ freedom in choice of arbitrators is not
illimited. (193) Scholars have stressed the importance of the principle of equality.
Professor Böckstiegel has stated that it is fundamental to ensure “that no party had an
advantage or a disadvantage right from the start. Great caution had to be exercised on
this point”, (194) while Emmanuel Gaillard “agreed that equality was the goal, including
equality in the structuring of the arbitration”. (195)
In analysing whether to sustain or refuse a request of challenge, the Court of Arbitration
may consider that the constitution of the arbitral tribunal should not allow a party to
build up the appropriate strategy in order to strengthen its position. By splitting the
settlement of indivisible disputes into two arbitral proceedings, and in attempting to
obtain the constitution of two different arbitral tribunals, the claimant may deprive the
defendant of its right to present its case relating to the second agreement with due
process and in an equal position to the claimant's. (196) It is the duty of the arbitration
institution to ensure that the parties will have a fair trial, (197) as is universally
conceived, and namely in Article 6 of the European Convention on Human Rights. (198)
It is important to consider the negative effects which the claimant's challenge may have
on the defendant's right to present its case. Arbitration institutions should consider that
by filing two parallel requests for arbitration, under each of the related agreements, a
party may be deliberately and artificially splitting the settlement of a single dispute
relating to obligations set forth by the same contractual relationship, for tactical
purposes only. Sometimes the claims submitted by a claimant in an arbitration are
nothing but an aspect of a larger dispute involving other agreements; sometimes
different aspects of the complex legal and business relationships created by these
various agreements and the courses of conduct pursued thereunder are pending before
another tribunal. The separation of the parallel proceedings may create a sort of
“watertight compartment” between their merits. This could, for instance, prevent the
defendant from raising, in the second arbitration, may argument based on the agreement
submitted to the first arbitration, although both agreements are parts of a general
agreement relating to the same operation.
In deciding not to join parallel interrelated cases, the ICC Court of Arbitration may create
an extremely difficult situation which could harm the defendant's case, and thus prevent
the arbitrators from having an overall view of the dispute. In some cases, if no link is
P 91 established between the parallel disputes, the fundamental conditions of a fair trial
may not be met, namely when the dispute between the parties involves the exceptio non
adimpleti contractus principle, for instance when one of the parties refrains from
performing its obligations under an agreement, by retaining sums owed, in order to
defend its contractual rights, that is, only because the other party did not perform its
obligations under another agreement belonging to the same group of contracts.
Whether or not the defendant is entitled in such a situation to raise the exceptio touches
the merits of the case and falls within the scope of the arbitrators’ jurisdiction, but it
seems logical that if the arbitral treatment of the two agreements is split, the defendant
might not be able even to raise the argument based on the exceptio and consequently
may be deprived of its right to present its case in an equal position to the claimant's. The
ICC Court should pay particular attention to a situation like this and should not ignore its
consequences, which would be contrary to the proper administration of justice. The
concept of “a fair hearing” cannot be overlooked. According to Judge Jean-Pierre Ancel,
“no arbitral award can be considered to be an enforceable jurisdictional decision in the
absence of procedural guarantees”. (199) Consequently, the claimant's request to have
two different panels of arbitrators, under such circumstances, could result in actual
manipulation of the constitution of the arbitral tribunal and should thus be dismissed by
the ICC Court in order to restore balance to the proceedings.
3. The Parties’ Duty to Co-operate in Good Faith
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Can a party be considered in good faith when, on the basis of the existence of two distinct
but identical arbitration clauses contained in two interrelated agreements, it claims for
the constitution of two distinct arbitral panels, thus increasing the costs of arbitration
and thereby creating a risk of contradicting awards and depriving its opponent of certain
means of defence, which could be raised under a single transaction and not under
separate agreements? Since the parties have the duty to co-operate in good faith in the
performance of the agreement, (200) as well as in the arbitral proceedings, there is no
reason why they should not have the same duty to co-operate in good faith in the
constitution of the arbitral tribunal. After all, the arbitration clause is nothing but one of
the clauses of an agreement, and the principle of good faith should consequently apply
to the constitution of the arbitral tribunal, which corresponds to the performance of the
obligations assumed under the arbitration clause.
Whenever an arbitration clause refers to an arbitration institution, the constitution of the
the
arbitrators (contrat d'investiture), (201) and the agreement between the parties and the
arbitration institution. (202) The contrat d'investiture is implemented through the
constitution of the arbitral tribunal. In case of a three-arbitrator panel, each party has
the right to designate a co-arbitrator. But, as all rights are susceptible of abuse, a party
may abuse its right to designate an arbitrator. The attitude of a party who refuses to
designate the same arbitrator in the parallel arbitral panels might be considered as a
violation of its obligation to perform, in good faith, its undertakings assumed under the
arbitration clause. (203) The parties should co-operate not only before but also after the
constitution of the arbitral tribunal. Indeed they should also co-operate in the
constitution of the arbitral tribunal. In Mr Jarvin's list of delaying manoeuvres by the
claimant, (204) it seems possible to add the constitution of simultaneous parallel arbitral
tribunals involving the same parties and a single economic operation. It should be borne
in mind that a co-arbitrator, although chosen by one of the parties, becomes the “judge”
of the two and, for this reason, the designation of the co-arbitrator, which is the
implementation of the contrat d'investiture, should be carried out by the parties in good
faith. As emphasized by President Pierre Bellet, it can no longer be admitted that the
designation of arbitrators be made without any participation of the adversary or at least
without any legal control other than the challenge. (205)
P 92 arbitral tribunal involves two agreements: the agreement between the parties and
It should be possible to fight an abuse committed by a party, and this is the duty of the
arbitration institution, (206) essentially when, as in the ICC system, the claimant has an
incontestable advantage in the construction of the arbitral structure. It is up to the
arbitration institution chosen by the parties to combat any abuse, by any of the parties,
of its rights in the performance of the agreement leading to the constitution of the
arbitral tribunal. If the ICC Court of Arbitration accedes to the challenger's request and
decides to appoint two different arbitrators in two parallel cases, this may create
difficulties in ensuring a proper administration of justice.
C. Are the icc rules sufficient to ensure good administration of justice?
One may wonder whether the provisions for joinder contained in the ICC Rules are
sufficient to provide the Court of Arbitration with efficient tools, enabling it to perform its
duty to ensure the proper administration of justice.
P 93 Parties often have opposing strategies and tactics and may take advantage of a
multiplicity of contracts either to prevent a single arbitration or to try to avoid parallel
arbitral proceedings from taking place. Accordingly, the question of determining whether
consolidation (stricto sensu and de facto) is convenient or not depends on the interests at
stake. As the parties may have different positions regarding consolidation, the existence
of an efficient remedy, available to the parties and prior to the beginning of the arbitral
proceedings, is absolutely imperative. The Rules of the ICC and of the other main
arbitration institutions have not, to date, set forth a general solution to settle any
procedural difficulties which may arise from two-party arbitrations regarding multi
contracts. (207) Accordingly, as demonstrated, the procedural position of the claimant
gives him, as a rule, certain procedural advantages, namely the possibility of
determining whether the issues will be settled before one or several requests for
arbitration, as the conditions for introducing the request or requests are not controlled
by the different arbitration institutions.
The claimant can prevent the joinder of parallel proceedings in spite of the existence of
Article 13 of the ICC Internal Rules. Actually, the constitution of the arbitral tribunal can
be a means for the claimant to avoid the joinder. As, rightfully, stressed by Antoine Kassis,
(208) the party which has introduced the second arbitration regarding the legal
relationship subject to pending arbitral proceedings between the same parties before
the Court of Arbitration is able to thwart the Court's power to order consolidation. In
order to obtain such a result, the party which introduced the second arbitration needs
only to designate, for this new arbitration, a different arbitrator from the one it had
chosen for the first arbitration. In this case, joinder cannot take place because the
claimant has exercised one of its rights under the ICC Rules, the right to prevent joinder
from taking place. By virtue of the claimant's rights, the Court is not only barred from
consolidating the related proceedings, but also prevented from rejecting the designation
of the new arbitrator, since the ICC Rules do not allow it to do so for this reason. In other
words, the joinder set forth by Article 13 of the Internal Rules is conditioned to the
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designation, by the claimant, in the new arbitration of the same arbitrator it chose in the
previous arbitration. This is how the Court seems to interpret and apply Article 13 in this
kind of situation. (209) As, in such circumstances, it can be assumed that the defendant
has no interest, on its side, to appoint a different arbitrator, if the same chairman is
appointed, the identity of the two panels will prevent a risk of contradicting awards.
In order to bypass the party blocking the joinder, the Court has sometimes appointed, in
the new arbitration, the same chairman it chose for the previous arbitration. However,
this may jeopardize the result of one of the two arbitrations and may give the dissatisfied
P 94 party a weapon against it. A time interval between the two arbitrations may constitute
enough grounds for a party to argue that there has been bias, and thus violation of the
principle of due process, by virtue of the award rendered on the debates which took in
the previous arbitration. (210)
The claimant's procedural advantage cannot be considered to be harmless as it has a
direct impact on the merits. This represents a violation of the principles of due process
and equality between the parties, whereas procedural rules serve to ensure the respect
of these principles. If the intention of the parties was to establish an interrelation
between their agreements, this interrelation should be reflected in the proceedings, that
is, interdependence should be taken into account in the constitution of the arbitral
tribunal.
The possibility for these institutions to control the desirability for the claimant to
introduce, at the same time, several proceedings regarding the same business
transaction against the same defendant is an important matter. As it is usually the
request for arbitration that outlines the issues which are brought before the arbitrators,
the claimant is, in fact, totally free to constitute the arbitration and, accordingly, to
dictate the course of the proceedings, to a certain extent. However, as the counter-claim
also contributes to determining the scope of the debate brought before the arbitrators, it
seems reasonable to provide the defendant with institutional possibilities of controlling
the procedural strategy designed by the claimant.
Unfortunately, the ICC International Court of Arbitration practically disposes of no
specific rule allowing it to oblige the claimant to submit issues arising from different
agreements of a single contractual relationship to a single arbitral tribunal. An
agreement between the parties seems to be the only remedy to this effect. However, the
parties’ consent does not always seem to provide a just and efficient solution to this
problem. The ICC Rules illustrate this institution's concern of not imposing any rigidity or
inflexibility to its usages, and its intention of having the greatest possible freedom of
decision. However, the inability of arbitration institutions to resolve disputes regarding
procedural aspects such as consolidation is a weakness which may affect their
credibility. It is therefore necessary to have rules which permit their intervention in order
to control arbitral proceedings.
The fact that arbitration rests on a consensual basis should not constitute an alibi for
arbitration institutions, allowing them to refrain from implementing justice. If arbitration
institutions, decide to strictly enforce the parties’ consent, there might be a great risk
that this consent will turn out, in practice, to be the claimant's will. It must not be
forgotten that their intervention is of an institutional nature, and that arbitration
institutions have the duty to participate in the performance of justice. What is the point
in paying administrative fees to arbitration institutions if they cannot give a satisfactory
solution to such a problem? Can it be claimed that good administration of justice has
been served in such a case?
P 95 It is sometimes disappointing to see the ICC Court entrench itself behind the formal
appearance of the agreements in order to justify its non-intervention. As the Court does
not state the reasons for its decisions, it is rather difficult to predict how it would react in
parallel two-party arbitrations. The party who believes that loyalty, fairness, reason and
justice should plead in favour of joinder thus feels very frustrated, especially because the
only solution left for such a party seems to be to play the game according to the
claimant's rules.
To avoid this vicious circle, there is no possibility for the defendant other than
introducing a parallel request for arbitration regarding all the disputes subject to the
different parallel arbitrations which were introduced by the claimant. In this case, what
would happen if the “new” defendant—the claimant in the parallel arbitrations
introduced previously—requested the ICC Court to break up the “new” arbitration into
two arbitrations? If the Court accepted this request, we would be back to our initial
hypothesis. In addition, this means that the Court can only separate and not consolidate
parallel proceedings in the absence of an agreement between the parties. This solution
would be absurd, especially in view of the fact that, although having powers to
consolidate ex efficio by virtue of Article 13, (211) in practice it only orders consolidation
when there is consent. The separation of the disputes in the absence of consent, and in
the absence of specific ICC provisions to this respect, would seem rather strange. Another
hypothesis would be for the Court to reject the “new” defendant's request. In this case,
one would be in the presence of a litispendence situation, that is three parallel
proceedings regarding the same disputes and between the same parties. If the Court
accepts the “new” claimant's position, this would also confirm that the party which takes
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the initiative of the arbitration has an advantage right from the start, as it can build the
arbitral structure according to its will. This conclusion demonstrates that the current
consolidation system of the ICC is pathological.
For completeness, the opposite situation should also be mentioned, where one of the
parties introduces a single arbitration concerning disputes arising out of different
interlocked agreements, and where the defendant requests the Court to order the
separation of the arbitral proceedings. Should the Court sustain or reject such a request?
Although Article 13 of the ICC Internal Rules does not expressly mention separation, it
should be considered that it tacitly gives the Court the power to refer the parallel
proceedings to different tribunals in certain situations. Article 13 should be interpreted
as allowing the Court to order separation according to the same principles that apply to
joinder. The Court should thus take into account the intent of the parties at the moment
of the negotiation and of the performance of the agreements as well as the economic
reality of the operation. Accordingly, in the presence of identical arbitration clauses in
each one of the litigious contracts, the ICC International Court of Arbitration would
P 96 probably not sustain such a request for separation. (212) On the other hand, if the
arbitration clauses are different, the separation of the arbitral proceedings would seem
to be more likely. (213)
In the absence of an institutional and practical solution regarding consolidation, it is up
to the arbitrators to co-ordinate parallel proceedings and to decide whether or not they
have jurisdiction over disputes arising out of related agreements.
III. Arbitrators and Multi-Contract Situations
As has been shown, most common-law and civil-law countries have not enacted rules
enabling the courts to consolidate two or more arbitrations without the consent of the
contracting parties, and the procedural rules of most arbitration institutions do not
provide for consolidation of parallel arbitral proceedings; additionally, even when an
institution's rules expressly provide for joinder, it is not sure that it will be implemented.
In ICC arbitration practice, consolidation is only carried out if the parties agree to it. (214)
In the absence of institutional or statutory rules and of the courts’ inherent power to
consolidate, how can complex arbitrations be dealt with in practice?
Although arbitrators play a central role regarding the conduct of arbitration proceedings,
they do not have the power to consolidate, unless there is agreement between the
parties. For this reason, when confronted with parallel arbitrations regarding multicontract situations, arbitrators have to find substitutes or alternatives to consolidation.
According to various authorities, it is up to the arbitrators to fill in the consolidation gap
found in most legal and institutional systems. Pierre Bellet considers that arbitrators
should endeavour to solve the procedural difficulties raised in complex arbitration and
that they should, by applying means borrowed from the procedural rules of the courts,
unofficially or officially co-ordinate and harmonize arbitral proceedings taking place in
parallel. (215)
Faced with the impossibility of implementing consolidation stricto sensu on the basis of
interrelation between the proceedings, it may be appropriate for arbitrators to give
some thought to the matter of interrelation between the proceedings it may be
appropriate for arbitrators to give some thought to the matter of interrelation between
contracts and to the relational contextual theory. (216) This could contribute to avoiding
the problems of non-consolidated proceedings. (217) In some situations, considering
distinct agreements in complete isolation from each other complies neither with the
economic reality of the operation, nor with the intention of the parties. In ICC Award No.
P 97 6829 of 1992 it was affirmed that:
“...there might be circumstances under which a tribunal's duty is to look beyond the
specific contract brought before it and to take into account the economic or business
realities behind the legal structure.” (218) According to Nagla Nassar (making reference to
ICC Award No. 5989 of 1989), (219) interpretation means taking into account the
surrounding circumstances and the facts which indirectly affected the formulation of the
agreement. (220)
If parallel arbitral panels rule on related disputes arising out of different agreements,
there is a risk of incompatible solutions. (221) For this reason there should be some kind
of co-ordination or harmonization between the parallel tribunals, for instance by holding
joint hearings or by exchanging information regarding the progress of the arbitral
proceedings. Arbitrators could also apply the principle of exception de connexité, (222) as
conceived for instance in French law, that is one of the arbitral tribunals should stay the
proceedings on the merits while waiting for the other tribunal to render a decision
concerning its jurisdiction over that issue if the decision to be rendered by that arbitral
tribunal is to have effect on the dispute submitted to the second arbitral tribunal. This
solution does not present any major difficulty regarding the arbitrators’ jurisdiction
because, by virtue of the principle of Kompetenz-Kompetenz, (223) an arbitral panel may
consider itself competent to rule over interrelated agreements. In Switzerland and in
Germany, for example, when a defendant declares set-off with a disputed claim which is
subject to a parallel arbitration, the arbitral tribunal has jurisdiction also with respect to
the defendant's claim. (224) According to doctrine, case-law and arbitral practice, the
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answer to the question of determining whether an arbitral tribunal constituted by virtue
of a contract may rule on dispute related to the other agreements should be found by
interpreting the intent of the parties. French doctrine considers that:
“...the arbitral tribunal has jurisdiction over related disputes if it results from the
circumstances that the parties have intended, at least implicitly, to entrust it [the
tribunal] with the task of settling the set-off disputes which might arise from a single set
P 97 of agreements.” (225) French courts have adopted a similar position. (226)
Conclusion
Whenever parties actually had the intention of being bound by a single agreement, which
—in their mind—constituted a single unit, whose elements could not be dissociated, and
whenever an economic link between the agreements demonstrates that there is a
necessary interdependence between them, such agreements should not be appreciated
separately. A refusal to consider obligations arising from related contracts as obligations
resulting from one indivisible agreement would not be a compliance with modern law
and practice involving contracts in international commercial arbitration.
From a procedural viewpoint, the sacrosanct principle of autonomie de la volonté should
thus be soothed by mandatory principles such as the proper administration of justice,
the equal treatment of parties, adversarial proceedings and the rights of defence, which
are part of international public policy as conceived by most national legal systems and
by the law of international arbitration.
Joinder of parallel arbitral proceedings between two parties bound by interrelated
agreements should thus be seriously considered by arbitrations institutions and
introduced in their Rules so that complex arbitrations dealing with multi-contracts would
be more efficient and meet the parties’ legitimate expectations. It does not seem
unreasonable to consider that joinder is a rule which can be disregarded when it is likely
to cause prejudice to a party and that the party desiring to set aside the joinder rule
should bring the evidence of its prejudice. After all, it is not certain that a party's simple
desire of having connected disputes judged separately constitutes a substantial right.
References
*)
Avocat au Barreau de Paris.
The author would like to express his gratitude to Maruska Guerreiro Lopes, Member
of the Bar of Sao Paulo, for her assistance in the preparation of this article.
1)
2)
3)
4)
5)
6)
7)
8)
9)
Among the few publications which contemplate this last question: for multi-contract
situations between, the same parties, see Horacio A. Grigera Naon, (ed.), Committee
on International Commercial Arbitration, Complex Arbitrations (Multi-Issue, MultiParty, Multi-Contract): First Interim Report, Report of the Sixty-Sixth Conference of
the International Law Association, Buenos Aires Conference 1994, The International
Law Association, London, 1994, pp. 699–704; and Antoine Kassis, Réflexions sur le
règlement d'arbitrage de la chambre de commerce internationale—Les déviations de
l'arbitrage institutionnel, L.G.D.J., Paris, 1988, Nos. 403–405; for multi-contract
situations, independent of the problems raised by the number of parties involved,
see Ph. Fouchard, E. Gaillard and B. Goldman, Traité de l'arbitrage commercial
international, Litec, Paris, 1996, Nos. 519 et. seq.
See Giorgio Bernini, Arbitration in Multi-Party Business Disputes, in Yearbook
Commercial Arbitration, (hereinafter Y.C.A.), Vol.V, Kluwer, Deventer, 1980, pp. 291–
300; and E. Gaillard, Pré-rapport sur l'arbitrage multi-partite et la consolidation de
procédures arbitrales connexes, The International Law Association Report of the
Sixty-Third Conference, Warsaw, 1988, p. 480.
“A party's will binds in absolute terms only himself and the person or persons with
whom he has contracted, and only with respect to agreed-upon obligations”: see
Nagla Nassar, Sanctity of Contracts Revisited: A Study in the Theory and Practice of
Long-Term International Commercial Transactions, Martinus Nijhoff Publishers,
London, 1995, p. 59.
See Naon, op. cit., supra, footnote 1, p. 690.
Quoted by V.V. Veeder in Consolidation: More News from the Front-Line—The Second
Shui On Case, Arbitration International, July 1987, p. 266.
See Naon, op. cit., supra, footnote 1, pp. 690 et seq.
This is only an illustrative list, not an exhaustive one.
See Alain Sayag, Le contrat-cadre: Exploration comparative, Litec, Paris, 1994.
See Andrea Giardina, La Convention de Rome et les contrats liés entre eux,
Conference at the Comité français de droit international privé, 10 May 1996
(forthcoming).
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10)
11)
12)
13)
14)
15)
16)
17)
18)
19)
20)
21)
22)
23)
24)
25)
26)
27)
28)
29)
30)
31)
For the notion of groups of contracts, see Jacques Ghestin, Traité des contrats—la
vente, L.G.D.J., Paris 1990, No. 1039; Bernard Teyssié, Les groupes de contrats, L.G.D.J.,
Paris, 1975; and Nassar, op. cit., supra, footnote 3, pp. 58 et seq.. As explained by
Professor Jacques Ghestin, id., among groups of contracts, we can find the ensembles
contractuels (contractual units), which include a number of agreements in view of a
common objective, and the chaîne de contrats, which are made up of several
successive agreements having the same object. According to Bernard Teyssié, an
ensemble de contrats is a “circular structure” of contracts, constituting a unified
whole. The various agreements constituting it are all tied up to each other as they
all have the same objective; they were all concluded in order to carry out a single
complex economic operation, namely sale, financing, services, technical assistance,
engineering and consultancy. These agreements have a common goal, in spite of the
fact that each one of them has its own object and despite the variety in their
immediate cause: see Jean Néret, Le sous-contrat, L.G.D.J., Paris, 1979, No. 210.
Ensembles de contrats can be broken down into two categories: the ensembles de
contrats interdépendants (indivisible and divisible) and the ensembles de contrats à
dépendance unilatérale (having a simple or a complex structure): see Néret, ibid.,
No. 64, note 212, p. 56. A chaîne de contrats, on the other hand, is tied up together as
a consequence of the identity of object that exists between the two or more
successive agreements, which do not have a common finality. The chaîne de contrats
can be divided into two categories: those which are composed of homogeneous
agreements, such as a series of successive sales having the same object, or those
which are composed of heterogeneous agreements, such as a sale of materials used
by a constructor in the performance of a contrat d'entreprise in favour of the maître
de l'ouvrage, sold or leased or sub-leased to a third party.
See F. Collart-Dutilleul and Ph. Delebecque, Contrats civils et commerciaux, Dalloz,
Paris, 1991, No. 7.
See Nassar, op. cit., supra, footnote 3, p. 58.
See Collart-Dutilleul and Delebecque, op. cit., supra, footnote 11, No. 56.
See connexe and connexité in Vocabulaire Juridique Association Henri Capitant.
See Daniel Ammar's comments on the French Cour de Cassation's decision dated 8
February 1994, JCP, 1995, edition G,II, 22455, p. 256.
“Justifiée par la doctrine au moyen, notamment, de l'idée de droit de rétention, c'est de
la pratique légale ou conventionnelle, des comptes de règlement, de
‘l'interdépendance inhérente à la notion de compte’, que cette jurisprudence relative à
la connexité a été inventée”: see Ammar, ibid., p. 258.
See René Cassin, De l'exception tirée de l'inexécution dans les rapports
synallagmatiques et de ses relations avec le droit de rétention, la compensation et la
résolution, thesis, Paris, 1914.
Quoted by Jan Paulsson, The ICSID Klöckner v. Cameroon Award: The Duties of
Partners in North–South Economic Development Agreements, 1 J. Int. Arb. 2, July 1984,
p. 162.
See Jacques Moury, De l'indivisibilité entre les obligations et entre les contrats, Revue
trimestrielle de droit civil, 1994, p. 255.
See Philippe Kahn, L'interprétation des contrats internationaux, J.D.I., 1981, pp. 15–17.
See Claude Reymond, Filiale commune et joint-ventue—Quelques problèmes
spécifiques, in E. Story Scientia (ed.), Modes de rapprochement structurel des
entreprises, 38th Seminar, Spa Balmoral, 19–20 November 1986, pp. 76–77.
Ibid., pp. 76–77.
“Relations commerciales régulières et réciproques consistant en des achats et ventes
concomitants de marchandises...les conventions successives d'où résultaient ces
échanges équilibrés, étaient commercialement et économiquement liées”: see Ammar,
op. cit., supra, footnote 15, p. 257.
Cass. com., 5 April 1994, JCP, 1994, edition G.,IV, 1551.
See Ammar, op. cit., supra, footnote 15, pp. 256–257.
See JCP, 1995, edition G, 22448, p. 237, note Jean-Pierre Rémery; JCP 1995, edition E,
No. 743; and Dalloz, 1996, Jurisprudence, pp. 322–325, note Grégoire Loiseau.
“A defaut d'obligations réciproques dérivant d'un même contrat, le lien de connexité
peut exister des créances et dettes nées de ventes et achats conclus en execution
d'une convention ayant défini, entre les parties, le cadre du développement de leurs
relations d'affaires, ou de plusieurs conventions constituant les éléments d'un
ensemble contractuel unique servant de cadre général à ces relations.”: Dalloz, ibid.,
p. 322; see also Cass. com., 12 December 1995, JCP 1996, edition G,I, No. 3958, note G,
Virassam.
“Les deux contrats d'approvisionnement du 1er janvier 1991, don't les achats et ventes
réciproques des mêmes animaux effectués par la société Lapidor étaient l'exécution,
étaient liés entre eux et constituaient les deux volets d'un ensemble contractuel
unique servant de cadre général aux relations d'affaires des parties.”: Dalloz, ibid., p.
322.
In Case No. 122/85—Poland, Y.C.A., 1989, pp. 187 et seq.
Ibid., p. 189.
See Jan Paulsson, Les obligations des partenaires dans un accord de développement
économique: la sentence arbitrale Cameroun v. Klöckner, Revue de l'arbitrage, 1984,
pp. 19 et seq.
28
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32)
33)
34)
35)
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37)
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48)
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51)
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56)
57)
58)
As the Cameroonese party had its headquarters in Eastern Cameroon, the
arbitrators applied French law, as this part of the country was based on the French
Civil Code system; ibid., pp. 28 et seq..
See Pierre Lalive, The First World Bank Arbitration, 51, B.Y.B.I.L., 1980, p. 159, cited by
Paulsson, op. cit., supra, footnote 31, at p. 52.
Y.C.A., 1994, p. 170.
“It is, therefore, not for this Tribunal to pass judgment upon any other contract,
however related to the Cargo Handling Contract it may be, or upon any corporate
entity other than claimant and defendant, however close such entity might be in
other respects to either claimant or defendant.”: ibid., pp. 88–89.
Award No. 1491, dated 20 July 1992, Y.C.A., 1993, pp. 88–89.
“Of course, it is possible to connect contracts in a juridically relevant manner,
producing the typical consequences as defined by case-law. This, however, requires
a specific, if tacit, intention of the parties, aiming at making the contracts
‘teleologically dependent or interdependent in view of the realization of a certain
interest’, so that which affects the one also affects the other. In casu, the Arbitrator
considers that there has been no such intention. The contracts refer indeed to one
another, but they do not do so in an univocal and clear manner allowing a
conclusion in that sense. In particular, the reference in the dispute resolution clause
aims at co-ordinating decisions, as correctly maintained by Main contractor; it
cannot jeopardize the mutual autonomy of the two contracts. The connection
between the two contracts, therefore, is only economic and functional; it does not
entail the mutual dependence and interdependence which is essential, according
to case-law, for the events concerning the one to concern the other as well...There is
no connection [between the contracts” such as to cause the events concerning one
contract to concern the other as well. A connection, however, does exist, as
mentioned above, on the economic and functional level. This fact is not devoid of
significance in the present dispute: it justifies the conclusion reached on the
impossibility to perform—in an ampler perspective than the mere interpretation of
EC provisions—and lends further strength to this interpretation.”: ibid., p. 89.
See Sayag, op. cit., supra, footnote 8, No. 181.
See Nassar's comments on the “relational contextual theory”, op. cit., supra,
footnote 3, pp. 58 et seq.
Like French courts, English and American courts are also empowered to order
consolidation of related legal actions. Order 4, Rule 10, of the Rules of the English
Supreme Court: see Dennis Thompson, The Same Tribunal for Different Arbitrations, 4
J. Int. Arb. 2, June 1987, pp. 111–112; and Rule 42(a) of the American Federal Rules of
Civil Procedure: see Julie C. Chiu, Consolidation of Arbitral Proceedings and
International Commercial Arbitration, 7 J. Int. Arb. 2, June 1990, p. 64, note 44, also
provide for the joinder of civil proceedings.
See Cass. civ. 1ère, 20 October 1987, JCP, 1987, edition G,IV, p. 400; CA Dijon, 25
January 1990, Gazette du Palais, 1991, 2, somm., p. 323.
CA Reims, 3 October 1991, Juris-Data No. 051520, mentioned by Paul Laroche de
Roussane, Jonction et disjonction d'instances, Jurisclasseur—Formulaire de Procédures,
September 1995, No. 29.
See Loïc Cadiet, Droit Judiciaire Privé, Litec, Paris, 1992, No. 632.
Article 102 of French New Code of Civil Procedure.
Civ. 2ème, 12 October 1978, Bull. II, No. 162, in Cadiet, op. cit., supra, footnote 43, No.
631, note 64.
Ibid., No. 633.
See a decision of the French Cour de Cassation dated 10 March 1969, mentioned by
Cadiet, ibid., No. 635, footnote 69.
Ibid., No. 635.
Ibid., No. 636.
See Naon, op. cit., supra, footnote 1, p. 700 and Cheri D. Eklund, A primer on the
Arbitration of NAFTA Chapter Eleven Investor—State Disputes, 11 J. Int. Arb. 4,
December 1994, pp. 149 and 163.
11 NYCRR, § 65.16(c)(7)(iii), mentioned by General Aksen, Les arbitrages multipartites
aux Etats Unis, Revue de l'Arbitrage, 1981, p. 102.
See Naon, op. cit., supra, footnote 1, p. 695.
See Gaillard, op. cit., supra, footnote 2, pp. 481 et seq.
Ibid., p. 482.
Ibid., p. 483.
See Neil Kaplan and Tony Bunch, in International Handbook on Commercial
Arbitration, Supp. 15, August 1993, p. 10; and Jan Paulsson, Le réforme de la loi de
l'arbitrage, de Hong Kong, Revue de l'arbitrage, 1984, pp. 325–331.
See A.J. Van den Berg, in International Handbook on Commercial Arbitration, Suppl.
7, April 1987, p. 20; and in Revue de l'arbitrage, 1988, pp. 536–541; Jan C. Schultsz, Les
Nouvelles dispositions de la législation néerlandaise en matière d'arbitrage, Revue de
l'arbitrage, 1988, pp. 209–222; and Gaillard, op. cit., supra, footnote 2, pp. 486–487.
Article 25 of the Argentine Draft permits court-ordered consolidation of two or more
arbitral proceedings whenever there is manifest convenience. In fact, it is important
to note that the text of Article 25 does not mention any requirement regarding the
fact that the consolidated arbitrations be subject to the same arbitration institution
or to the same rules: see Naon, op. cit., supra, footnote 1, p. 700.
29
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59) Paragraph 1281.3 of the California Civil Procedure Code permits consolidation of
60)
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65)
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68)
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87)
separate arbitration proceedings under certain circumstances: see Aksen, op. cit.,
supra, footnote 51, p. 101; and Chiu, op. cit., supra, footnote 40, p. 65.
See Aksen, id.
As mentioned by Howard Miller, “Consolidated arbitration now has spread to three
continents. It appears to be a fashion whose time has come.”: see Veeder, op. cit.,
supra, footnote 5, p. 264.
Id.
See Jerzy Jakubowsky, L'arbitrage international dans les litiges commerciaux
multilatéraux—l'expérience polonaise, Revue de l'arbitrage, 1981, pp. 78 et seq.
See Pierre Bellet, Le Symposium International de Varsovie sur l'arbitrage
international dans les litiges commerciaux multilatéraux, Revue de l'arbitrage, 1981,
p. 51.
See E. Gaillard, L'affaire Sofidif ou les difficultés de l'arbitrage multipartite, Revue de
l'arbitrage, 1987, p. 275.
According to the Article 35(b)(2) of the new Draft English Arbitration Bill, “Unless the
parties agree to confer such power on the tribunal, the tribunal has no power to
order consolidation of proceedings or concurrent hearings.”
That is, to put together related proceedings by consolidating them into one single
arbitral panel.
That is, to co-ordinate or harmonize parallel proceedings by appointing the same
arbitrators in the parallel proceedings or by establishing some kind of link between
the parallel proceedings.
See Compania Española de Petroleos S.A. v. Nereus Shipping, 527 F 2d. 966 (2d Cir.
1975), in Naon, op. cit., supra, footnote 1, p. 700.
See Gerald Aksen, in a paper presented at the International Arbitration Symposium
in Warsaw in 1980, quoted by Thompson, op. cit., supra, footnote 40, p. 114, note 1.
For more information regarding court-ordered consolidation in the United States,
see William M. Barron, Court-Ordered Consolidation of Arbitration Proceedings in the
United States, 4 J. Int. Arb. 1 March 1987, pp. 81–86; David J. Branson and Richard E.
Wallace Jr., Court-Ordered Consolidated Arbitrations in the United States: Recent
Authority Assures Parties the Choice, 5 J. Int. Arb. 1, March 1988, pp. 89–94; and Chiu,
op. cit., supra, footnote 40, pp. 62 et seq.
See Government of the United Kingdom of Great Britain v. Boeing Co., 998 F 2d. 68 (2d
Cir. 1993) 187, Harvard Law Review, 1993, pp. 499–504, mentioned by Naon, op. cit.,
supra, footnote 1, p. 700; North River Ins. Co. v. Philadelphia Reinsurance Corp., 856 F
Supp. 850 (SDNY 1994) mentioned in Fouchard et al., supra, footnote 1, No. 521, note
228, p. 320; see also Richard E. Wallace Jr., Consolidated Arbitration in the United
States—Recent Authority Requires Consent of the Parties, 10 J. Int. Arb. 4, December
1993, pp. 5–17.
See Gérard Pluyette's comments regarding Arbitration and Third-Parties, Revue de
l'arbitrage, 1988, p. 536.
See Pierre Bellet, Revue de l'arbitrage, 1987, p. 69. For the application of Article
1444 of the French New Code of Civil Procedure to international arbitration, see
Fouchard et al., op. cit., supra, footnote 1, No. 833.
See Fouchard et al., ibid., No. 856 et seq.
Decision rendered by the London Court of Appeal on 23 June 1982, Lloyds Law Report,
1982, Vol. 2, part 5, p. 425; see also J. Paulsson's comments in Revue de l'arbitrage,
1983, pp. 119–130; and Gaillard, op. cit., supra, footnote 2, pp. 489 et seq. Although
this case involves a multi-party arbitration, the London Court of Appeal's reasoning
can be applied, a fortiori, to two-party arbitrations.
Veeder, op. cit., supra, footnote 5, pp. 262–266; Howard S. Miller, Consolidation in
Hong Kong: the Shui On Case, Arbitration International, 1987, pp. 87–90.
See Gaillard, op. cit., supra, footnote 66, pp. 275–291; see also Gaillard, op. cit., supra,
footnote 2, p. 490.
See V.V. Veeder, Multi-party Disputes: Consolidation Under English Law: The Vimeria—
A Sad Forensic Fable, Arbitration International, 1986, p. 319.
See Fritz Nicklisch, Multi-Party Arbitration—Typical Multi-Party Disputes and Civil
Court Proceedings, International Construction Law Review, 1995, p. 425.
See H. van Houtte, The Rights of Defence in Multi-Party Arbitration, International
Construction Law Review, 1989, p. 398.
See President Bellet's comments on the Setec decision rendered by the Tribunal de
Grande Instance de Paris sitting in Chambers on 13 January 1986, in Bellet, op. cit.,
supra, footnote 75, p. 68.
For multi-party arbitration, see Gaillard, who affirmed that “by contemplating the
classic examples of construction law or of contrats en chaîne, one can appraise the
risk of incoherences which arise from the lack of articulation in the settlement of
disputes which may arise from complex contractual arrangements.”: op. cit., supra,
footnote 2, p. 480.
See Ulf Franke's (Secretary-General of the SCC Arbitration Centre in Stockholm)
interview on 20 March 1989 by Julie C. Chiu, mentioned in the latter's article, op. cit.,
supra, footnote 40, p. 56.
See Chiu, ibid., at p. 56.
Id.
30
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88)
89)
90)
91)
92)
93)
94)
95)
96)
97)
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99)
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102)
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105)
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116)
117)
See Veeder, op. cit., supra, footnote 5, pp. 262–263.
Ibid., p. 264.
See Thompson, op. cit., supra, footnote 40, p. 111.
See footnotes 2 and 3, supra.
For French law, see a judgment by the Assemblée plénière de la Cour de Cassation of
12 July 1991, Dalloz, 1991, Jurisprudence, p. 549, and the decision of the Commercial
Section of the Cour de cassation dated 28 May 1996, which ruled that the
indivisibility of two contracts concluded by different contracting parties has the
following consequence; the termination of one results in the termination of the
other: Dalloz Affaires, 1996, No. 28, Chroniques, p. 872. For a new approach of the res
inter alios acta rule, as expressed in Article 1165 of the French Civil Code, see
Mireille Bacache-Gibeili, La relativité des conventions et les groupes de contrats,
L.G.D.J., Paris, 1996.
See Nicklisch, op. cit., supra, footnote 81, p. 427; J. Paulsson and N. Rawding, Les
aléas de la confidentialité, The ICC International Court of Arbitration Bulletin, May
1994, p. 49; Michael Collins, Privacy and Confidentiality in Arbitration Proceedings,
Arbitration International, 1995, pp. 321–336: and Hans Smit, Confidentiality in
Arbitration, Arbitration International, 1995, pp. 337-340.
See Chiu, op. cit., supra, footnote 40, p. 57.
See Dominique Hascher, Consolidation of Arbitration by American Courts: Fostering or
Hampering International Commercial Arbitration? 1 J. Int. Arb. 2, July 1984, pp. 133–
134.
See Stipanowich, quoted in Chiu's article, op. cit., supra, footnote 40, p. 57, note 17.
See Annual Report, Committee on Arbitration, Chamber of Commerce of the State of
New York, 2 May 1929, p. 7, quoted by Chiu, ibid., p. 57.
According to Chiu, ibid., p. 58, court-ordered compulsory consolidation is based on
the parties’ intention of having a “speedy and fair resolution of their disputes” and
shall be interpreted as a “judicial modification of contracts” which did not mention
all the details concerning procedure.
Ibid., pp. 58–59, and Nicklisch, op. cit., supra, footnote 81, p. 427.
See Chiu, op. cit., supra, footnote 40, p. 60.
See the Dutco decision, rendered by the First Civil Section of the French Cour de
Cassation on 7 January 1992, commented by Pierre Bellet, Revue de l'arbitrage, 1992,
pp. 470–482; Charles Jarrosson, J.D.I., 1992, pp. 707–736; Eric Schwartz, Multi-party
Arbitration and the ICC—In the Wake of Dutco, 10 J. Int. Arb. 3, September 1993, pp. 5–
19; Christopher R. Seppala and Daniel Gogek, Multi-party Arbitration under ICC Rules,
International Construction Law Review, 1990, pp. 358–363; Christopher R. Seppala,
French Supreme Court Nullifies ICC Practice for Appointment of Arbitrators in MultiParty Arbitration Cases, International Construction Law Review, 1993. pp. 222–227.
See Chiu, op. cit., supra, footnote 49, p. 59.
Ibid., p. 61.
See Sigvard Jarvin, Consolidated Arbitrations, the New York Arbitration Convention
and the Dutch Arbitration Act 1986—A Critique of Dr Van Den Berg, Arbitration
International, July 1987, pp. 254–257.
Id.
See A.J. Van Den Berg, Consolidated Arbitrations and the 1958 New York Arbitration
Convention, Arbitration International, October 1986, pp. 367–369; and Consolidated
Arbitrations, the New York Arbitration Convention and the Dutch Arbitration Act 1986—
A Replique to Mr Jarvin, Arbitration International, July 1987, pp. 257–262.
See Gaillard, op. cit., supra, footnote 2, p. 488.
Id.
This means that there was no consent of the parties themselves regarding the choice
of a legal system admitting consolidation.
See Gaillard, op. cit., supra, footnote 2, p. 488.
See Pierre Bellet, op. cit., supra, footnote 65, p. 65.
Y.C.A., 1989, p. 137.
See Nassar, op. cit., supra, footnote 3, pp. 60–61.
See President Bellet's comments on the SETEC decision regarding multi-party
arbitration and connexity between a garantie and a demande principale: Paris,
Tribunal de Grande Instance, 13 January 1986, supra, footnote 75, p. 68.
This can be done by the intervention, at the beginning of the proceedings, of the
arbitration institution designated by the parties, if any, or by national courts. The
latter hypothesis, that is, court-ordered consolidation can only be performed in
some countries, namely Hong Kong and the Netherlands: see Part One, SectionsII.B.1
andII.B.2(a).
If the parties do not reach an agreement in this respect, it is necessary to resort to
the appointing authority chosen by the parties, namely an arbitral institution such
as the ICC or another institution chosen by virtue of the UNCITRAL Rules or a
national court. This duty may become very difficult when one of the parties contests
the alleged interrelation between the different arbitral proceedings: see Bellet, op.
cit., supra, footnote 75, p. 70.
Id.
31
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118) Of course, the solution will also depend on the applicable procedural law as well as
119)
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*)
137)
138)
139)
140)
141)
142)
143)
144)
145)
on the law and case-law of the place of arbitration: see Part One, SectionsII.B.1
andII.B.2(a).
See Bellet's comments regarding multi-party arbitration, op. cit., supra, footnote 75,
p. 68.
See Bernini, op. cit., supra, footnote 2, p. 293.
See Gaillard, op. cit., supra, footnote 2, p. 493.
In a multi-party clause, these difficulties are: the uncertainty of knowing in advance
the number and identity of the parties which may be involved in a dispute, which
may make it difficult to determine a satisfactory method of selecting the arbitral
tribunal plus the difficulty in distinguishing whether two-party arbitration is
sufficient and when other parties’ participation may also be needed. But these
difficulties do not occur in two-party disputes. In the context of two-party
arbitrations, it is easy for parties to include some reference to consolidation in their
multi-contracts, as all the concerned parties are sitting around the same table and
all have the necessary elements in their hands.
See Chiu, op. cit., supra, footnote 40, pp. 70-72; and Morera, L'arbitrage international
et les nouvelles formes de décentralisation industrielle, quoted by Bellet, op. cit.,
supra, footnote 65, p. 55.
Parties may wish to include anti-consolidation clauses in their agreements: see
Gaillard, op. cit., supra, footnote 2, p. 493.
According to Dennis Thompson, “the contractual theory of arbitration inhibits the
authorities from providing for consolidation in many countries. Consolidation,
however, may be necessary to secure justice between the parties, and many parties
would be well advised to agree to consolidated arbitration proceedings, even
though such a refusal may seem to confer upon them a temporary advantage”, op.
cit., supra, footnote 40, p. 120.
See Chiu, op. cit., supra, footnote 40, p. 71.
Barron, op. cit., supra, footnote 72, p. 86.
See Bellet, op. cit., supra, footnote 75, p. 57; and Final Report on Multi-Party
Arbitration, Approved by the ICC Commission of International Arbitration, Working
Party having Jean-Louis Delvolvé as Chairman, The ICC International Court of
Arbitration Bulletin, May 1995, p. 36, No. 76 et seq.
Former Judge at the International Court of Justice.
See B. Ajibola, Les recours contre l'arbitre pendant la procédure arbitrale, The ICC
International Court of Arbitration Bulletin—Le statut de l'arbitre, December 1995,
pp. 116 et seq.
Ibid., p. 116.
Ibid., pp. 116–117.
See Veeder, op. cit., supra, footnote 80, p. 321.
See Pierre Bellet, op. cit., supra, footnote 65, pp. 58–59.
Ibid., p. 59.
“13.1 Unless the parties at any time agree otherwise, and subject to any mandatory
limitations of any applicable law, the Tribunal shall have the power, on the
application of any party or of its own motion, but in either case only after giving the
parties a proper opportunity to state their views, to...(c) allow other parties to be
joined in the arbitration with their express consent, and make a single final award
determining all disputes between them.”
“If an arbitration is initiated between parties already involved in another
arbitration governed by these Rules, the CCIG may assign the second case to the
arbitral tribunal appointed to decide the first case, in which case the parties shall
be deemed to have waived their right to select an arbitrator in the second case.”
See Final Report on Multi-Party Arbitration, op. cit., supra, footnote 128, p. 35, Nos. 66
et seq.
See Part One, SectionI.
See Final Report on Multi-Party Arbitration, op. cit., supra, footnote 128, p. 35, No. 70.
Ibid., p. 35, No. 70.
See Naon, op. cit., supra, footnote 1, p. 700.
Namely two contradicting awards that annual each other, thus resulting in a denial
of justice.
For the duties and responsibilities of the ICC in case of fault or negligence in the
organization and in the administration of the arbitration, see Fouchard et al., supra,
footnote 1, No. 992, p. 570.
See Jacques El Hakim, Litiges commerciaux multilatéraux dans le cadre de projets au
Moyen Orient, Revue de l'arbitrage, 1981, p. 91.
See Fouchard et al., op. cit., supra, footnote 1, No. 521, p. 318.
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146) “It is beyond doubt that the parties intended to have their disputes settled by
arbitration, that both the arbitration clauses and the parties are identical and that
the claims are interrelated in such a manner that in the context of an international
arbitration we must find that their joint examination—apart from allowing a better
understanding of the facts of the case—is admissible in the light of the intention of
the parties, as expressed in the arbitration clause. In fact, the Purchase Contract has
been concluded “in application of Article 4.3 of the Basic Agreement’ and it refers in
regard to the price of the purchase, to Annex B 3 of the Basic Agreement. Thus,
contrary to what employer B contends, the mere fact that a new arbitration clause
has been included does not show the unequivocal intention of the parties to rule
out the arbitral procedure provided for in the Basic Agreement. On the contrary, the
Purchase Contract falls squarely within the contractual provisions of the Basic
Agreement...Since the two clauses overlap perfectly, the arbitral tribunal finds that
the contractor's request to have the disputes heard in one arbitration procedure is
admissible. It also finds that it has jurisdiction in the ICC arbitration over all
disputes between the parties, also those arising under the Purchase Contract.”: ICC
Award No. 5989, Y.C.A., 1990, pp. 77–78.
147) This situation is very similar to the one known as arbitration clause by reference:
148)
149)
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164)
165)
166)
167)
168)
see B. Oppetit, La clause arbitrale par référence, Revue de l'arbitrage, 1990, pp. 551–
569. According to this author, considering the principles which govern arbitration
clauses, there is no problem a priori regarding the validity of an arbitration clause
appearing in a document annexed to the main agreement, even if the latter does
not make any reference to the existence of such a clause, as long as this agreement
is part of the parties’ professional relationship and as long as the arbitration clause
is in compliance with the legitimate expectation of the parties.”, p. 559.
In the absence of express contractual provisions contrary to it, the arbitration
clause contained in the general agreement applies to the ancillary agreements by
virtue of the interrelation between them.
See Fouchard et al., op. cit., supra, footnote 1, p. 318.
See the Klöckner arbitration, in Paulsson, op. cit., supra, footnote 31, p. 22.
See the Sofidif case, Cour d'appel de Paris, 19 December 1986, in Gaillard, op. cit.,
supra, footnote 66, p. 275; and Cour de Cassation, 8 March 1988, Revue de l'arbitrage,
1989, p. 481; Revue de l'arbitrage, 1991, p. 326; see also ICC Award No. 5971, Bull, ASA
1995, p. 728.
See Naon, op. cit., supra, footnote 1, p. 699.
See Fouchard et al., op. cit., supra, footnote 1, p. 319.
See, namely, Article 25 of the Argentine Draft and Article 1126 of the NAFTA Treaty,
mentioned in Naon, op. cit., supra, footnote 1, p. 700.
See Sayag, op. cit., supra, footnote 8, No. 111.
For instance, in successive sales, parties only mention the price and/or the quantity
in their exchange of correspondence.
See Part Two, SectionII. A.1.(c)(i)— The arbitration clauses are identical.
Application contracts explicitly or implicitly refer to the framework agreement for
all the other provisions, including the arbitration clause. For this reason, the
absence of an arbitration clause in an application agreement does not necessarily
mean that the parties did not intend to have their disputes subject to arbitration.
On the contrary, this absence can be interpreted as a tacit reference to all the
terms of the framework agreement, including its arbitration clause. This situation is
very similar to the one known as arbitration clause by reference: see footnote 147,
supra.
According to a French court, the arbitration clause contained only in one agreement
is also applicable to disputes arising out of later, closely interrelated agreements
which have the object of completing the main agreement: see a decision rendered
by the Tribunal de Grande Instance de Paris on 20 May 1987, Revue de l'arbitrage,
1988, p. 573. Whenever it is possible to deduct from the previous contractual
practice between the parties that there was implicit acceptation of the arbitration
clause regarding the latest agreement, the latter may also be submitted to
arbitration: see Fouchard et al., op. cit., supra, footnote 1, No. 523, pp. 321–322.
See Fouchard et al., Ibid., p. 322.
In a decision rendered by the Paris Court of Appeal on 9 December 1987, Revue de
l'arbitrage, 1988, p. 573, it was ruled that by virtue of the competence clause
referring to a French Court included in a later agreement, the arbitration clause
contained in a previous contract became null and void.
Y.C.A., 1995, p. 47.
Ibid., pp. 47–48.
See Part Two, SectionII.A.1(c)(i) and (ii)— The arbitration clauses are different.
See Final Report on Multi-Party Arbitration, op. cit., supra, footnote 128, p. 35, No. 69.
“Article 16—The parties may make new claims or counter-claims before the
arbitrator on condition that these remain within the limits fixed by the Terms of
Reference provided for in Article 13 or that they are specified in a rider to that
document, signed by the parties and communicated to the International Court of
Arbitration.”
See Final Report on Multi-Party Arbitration, op. cit., supra, footnote 128, p. 35, No. 71.
Ibid., p. 36, No. 77.
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169) Ibid., p. 36, No. 78.
170) See Ajibola, op. cit., supra, footnote 130, p. 117; and W.L. Craig, W.W. Park and J.
171)
172)
173)
174)
175)
176)
177)
178)
179)
180)
181)
182)
183)
184)
185)
186)
187)
188)
189)
190)
191)
192)
193)
194)
Paulsson, International Chamber of Commerce Arbitration, ICC Publishing, Paris, 1990,
pp. 232 et seq.
See Ajibola, id.
Id.
Id.
See Catherine Kessedjian , Principe de la contradiction et arbitrage, Revue de
l'arbitrage, 1995, pp. 381–410; Fouchard et al., op. cit., supra, footnote 1, Nos. 1638 et
seq.
Ben Nasser v. BNP and Crédit Lyonnais, Paris, 14 October 1993, Revue de l'arbitrage,
1994, No. 2, p. 380, note Pierre Bellet; and J.D.I., 1994, p. 446, note E. Loquin.
According to the Court, “le principe de la contradiction n'est pas violé, pas plus que les
droits de la défense, lorsqu'un même arbitre statue dans deux instances parallèles.”:
ibid.
See the French case-law and the decision rendered by the European Court on
Human Rights mentioned by van Houtte, op. cit., supra, footnote 82, pp. 397–398.
Ibid., p. 398.
Ibid., p. 397.
See e.g., M. Bedjaoui, Des fortes vérités de Cassandre aux modestes correctifs de
Némésis, in Etudes de Droit International en l'Honneur de Pierre Lalive,p. 396, No. 26
and No. 35.
“Aucun principe ne s'oppose à ce qu'un arbitre, juge et non mandataire de la partie qui
l'a désigné, qui voit son pouvoir de juridiction procéder de la volonté commune des
parties, même si sa désignation est faite sur le choix d'une seule partie, soit appelé à
statuer sur l'appel en garantie formé après une procédure principale don't il a eu
précédemment à connaître comme arbitre. Pour cet arbitre, la connaissance de la
procédure antérieure n'est pas de nature à mettre en cause son impartialité ainsi que
son objectivité, ni même son aptitude à juger sereinement le nouveau litige, dès lors
que sa personne ne fait l'objet d'aucune contestation sérieuse.”: see, SETEC v. SICCA,
Tribunal de Grande Instance de Paris, Ordonnance de référé, 13 January 1986, Revue
de l'arbitrage, 1987, note Pierre Bellet, p. 63; see also, G. Aguilar Alvarez , The
Challenge Procedure: The Role of Arbitral Institutions, the Interventions of Local
Courts, in The Arbitral Process and the Independence of Arbitrators, ICC
Publishing,1991, p. 71
See Craig, Park and Paulsson, op. cit., supra, footnote 170, p. 233.
See Ajibola, op. cit., supra, footnote 130, p. 117; Craig, Park and Paulsson, ibid., pp.
233 et seq.; and Pierre Bellet's comments on the SETEC decision, op. cit., supra,
footnote 75, p. 73.
See Craig, Park and Paulsson, ibid., pp. 233–234.
According to Pierre Bellet, who comments on the SETEC case, the arbitration
regarding the demande principale and the arbitration regarding the demande en
garantie constitute two different cases and for this reason there is no ground for
challenging an arbitrator participating in both cases: see op. cit., supra, footnote 75,
p. 74.
See E. Gaillard, L'interdiction de se contredire au détriment d'autrui comme principe
général du droit du commerce international, Revue de l'arbitrage, 1985, pp. 241–258.
See Bellet, op. cit., supra, footnote 75, p. 73.
See, Guide to ICC Arbitration, ICC Publishing, Paris, 1994, p. 33; and Bedjaoui, op. cit.,
supra, footnote 180, p. 386, No. 6.
See Ajibola, op. cit., supra footnote 130, pp. 117–118, who mentions a practical
application of this solution by the Iran–U.S. Tribunal, at his footnote 38. See also
Bellet's comments on SETEC v. SICCA, op. cit., supra footnote 181, p. 63 et seq.,
especially pp. 68 and 70.
Abu Dhabi Gas Liquefaction Co. Ltd. v. Western Bechtel Corporation's, decision
rendered on 23 June 1982: see Part One, SectionII.B.2(b); and footnote 77, supra.
See Fouchard et al., op. cit., supra, footnote 1, No. 1638, p. 962.
See the Dutco decision in Fouchard et al., ibid., No. 792, p. 485.
Ibid., No. 793, p. 485.
See Committee on International Commercial Arbitration, Working session of 19 August
1994, 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.
195) Ibid., p. 713 .
196) The principle of due process applies not only to questions of law but also to
questions of fact: see Fouchard et al., op. cit., supra, footnote 1, at No. 1639, p. 964.
197) See Philippe Fouchard, Les institutions permanentes d'arbitrage devant le juge
étatique, in Revue de l'arbitrage, 1987, p. 256, No. 42.
198) For a discussion on the application of the European Convention on Human Rights to
arbitration, see Charles Jarrosson , L'arbitrage et la Convention européenne des droits
de l'homme, Revue de l'arbitrage, 1989, p. 573.
199) See Jean-Pierre Ancel, French Judicial Attitudes Toward International Arbitration,
Arbitration International, 1993, p. 127.
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200) See the ICC Award No. 3131 of 26 October 1979, Norsolor, Revue de l'arbitrage, 1983,
201)
202)
203)
204)
205)
206)
207)
208)
209)
210)
211)
212)
213)
214)
215)
216)
217)
218)
219)
220)
221)
222)
223)
224)
225)
226)
p. 525; and Pierre Mayer's comments on the Beyrard decision rendered by the Paris
Court of Appeal of 12 January 1993, Revue de l'arbitrage, 1994, p. 615.
That is, the agreement through which the parties entrust the mission of settling their
dispute to the arbitrators: see M. de Boisséson, Le droit français de l'arbitrage interne
et international, GLN—Joly Paris, 1990, No. 202; and Fouchard et al., op. cit., supra,
footnote 1, Nos. 1101 et seq.
That is, the agreement through which the parties entrust the mission of organizing
and administrating the arbitral proceedings to the arbitration institution: see
Fouchard et al., op. cit., supra, footnote 1, at Nos. 974 et seq., pp. 561 et seq.
See Sigvard Jarvin, L'obligation de coopérer de bonne foi, exemples d'application au
plan de l'arbitrage international, L'arbitrage commercial international—L'apport de la
jurisprudence arbitrale—Seminars of 7 and 8 April 1986, ICC Publishing, 1986, pp. 157–
179.
Ibid., pp. 175 et seq.
See Bellet, op. cit., supra, footnote 75, p. 72.
For the duties of the ICC, see Fourchard et al., op. cit., supra, footnote 1, Nos. 974 et
seq., pp. 561 et seq.
The Working Party on Revision of the ICC Rules does not even mention this point: see
Richard H. Kreindler, Impending Revision of the ICC Arbitration Rules—Opportunities
and Hazards for Experienced and Inexperienced Users Alike, 13 J.Int.Arb. 2, June 1996,
pp. 45 et seq.
See Kassis, op. cit., supra, footnote 1, Nos. 403 et seq.
Id.
Ibid., No. 404 .
See Part Two, SectionII.A.1(b) .
See the hypothesis mentioned in Part Two, SectionsII.A.1(c)(i) and (ii) under —The
arbitration clauses are identical; and SectionII. A.1(c)(iii).
See the hypothesis mentioned in Part Two, SectionsII.A.1(c)(i) and (ii) under— The
arbitration clauses are different, and (iii).
As discussed in Nos. 69 to 72, supra, Article 13 of the ICC Rules expressly empowers
the Court of Arbitration to order joinder in the absence of the parties’ consent when
certain requirements are met. But in practice, the Court conditions joinder to the
parties’ consent.
See P. Bellet, op. cit., supra, footnote 65, p. 62.
See Part One, SectionI.
See Part One, SectionIII.A.
Y.C.A., 1994, p. 170.
This case involved a multi-party arbitration regarding a frame-work agreement and
application contracts: see Y.C.A., 1990, pp. 74 et seq.
See Nassar, op. cit., supra, footnote 3, p. 64.
For the problems relating to inconsistent awards, see Part One, SectionIII.A.2
See Part One, SectionII.A.2(a) and (b).
See Pierre Mayer , L'autonomie de l'arbitre international dans l'appréciation de sa
propre compétence, Recueil des cours de l'Académie de droit international, La
Haye, 1989, Tome 217, p. 327.
See Michael E. Schneider, Multi-fora disputes, Arbitration International, 1990, pp.
112–113.
See Fouchard et al., op. cit., supra, footnote 1, at No. 522, p. 320.
See a decision rendered by the French Cour de Cassation dated 5 March 1991, Revue
de l'arbitrage, 1992, p. 66; a French Cour de Cassation's decision dated 9 June 1970,
Bull. civ.IV No. 190 mentioned in Fouchard et al., ibid., No. 522, footnote No. 232; see
also a decision rendered by the Paris Court of Appeal dated 28 February 1992, Revue
de l'arbitrage, 1992, p. 649, regarding an “employment” agreement annexed to a
protocole concluded for the sale of a company, which included an arbitration
clause.
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