The Doctrine of Group of Companies: A Modern Approach to Consent in Arbitration Proceedings?

 Party autonomy is a foundational pillar in arbitration proceedings. An arbitration agreement reflects the parties’ willingness to be legally bound within the contours of that agreement. That is to say that parties to an arbitration agreement mutually consent to bestow jurisdiction upon a court and/or tribunal to decide certain disputes by their choice of law. However, in recent demanding times, in order to meet the ends of justice, courts and tribunals, under certain exceptional circumstances, have allowed extension of arbitration agreements to bind non-signatories.

This article seeks to briefly review such exceptional circumstances under which courts and tribunals have approved joinder of non-signatories as party to the arbitration agreement by invoking the Group of Companies doctrine and the implications drawn by such joinder in absence of consent to be bound by the arbitration agreement.

APPLICATION OF THE DOCTRINE IN ARBITRATION PROCEEDINGS

In broad terms, the doctrine is often utilised to bind a third party to an arbitration agreement when such a third party either forms part of the same group of companies or when the third party was actively involved in the negotiation, enforcement or performance of the contract or derives direct benefit from the performance of the contract. In the past, the doctrine has also been utilised to bind a consenting third party to an arbitration agreement as well as a non-consenting third party, in absence of formal consent to be bound by such an agreement.

Read More: https://tlegal.com/blog-details/the-doctrine-of-group-of-companies-a-modern-approach-to-consent-in-arbitration-proceedings

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