10.01  This chapter examines consent to arbitration related to procedural mechanisms. Consolidation and joinder/intervention in international arbitration have generally been possible only where the parties have unanimously agreed to such a result directly in their arbitration agreements, or indirectly by adopting arbitration rules which provide for consolidation and/or joinder/intervention of third parties.¹ Where the parties have not unanimously consented, national laws generally do not permit consolidation or joinder/intervention, as this would go against the principle of party autonomy.² Nevertheless there are some exceptions.

10.02  The chapter first discusses joinder and intervention of third parties in arbitral proceedings (Section A) and then consolidation of different arbitrations (Section B). Finally, bearing in mind that the goal of arbitration is to have an enforceable award, some considerations about enforcing arbitral awards in multiparty arbitrations will be made (Section C).

10.03  Joinder of third parties or their intervention in the proceedings is well known in national courts. In national courts, for the efficient administration of justice, procedural laws contain provisions allowing the joinder or intervention of third parties, irrespective of whether all parties concerned agree.³ The same needs may arise in arbitral proceedings. However, joinder (p. 166) or intervention in arbitrations is generally only possible if all parties involved (including, therefore, the joining third party) and the arbitral tribunal consent.⁴ The consent of all parties is necessary, because of the contractual nature of arbitration and its confidentiality.⁵

10.04  Through the adoption of arbitration rules it is possible for the parties to consent indirectly to the joinder and intervention of third parties in arbitral proceedings. However, the solutions adopted in the arbitration rules of the different institutions differ.

10.05  With regard to the joinder of additional parties, ICC arbitration has gone through an interesting evolution which has led to the adoption of Article 7 with the heading ‘Joinder of Additional Parties’ in the new ICC Rules (2012). This evolution reflects the increasing awareness of the importance of multiparty arbitration.

10.06  The ICC Rules in the past did not address many of the issues that might arise in a multiparty context, such as, for example, the joinder of parties not named in the request for arbitration.⁶ Indeed, by referring only to ‘claimant’ and ‘respondent’, the ICC Rules (1998) were based on the assumption of a bipolar conception of the process (even though there might have been a number of parties on each side).⁷ One of the most controversial topics concerning multiparty scenarios in ICC arbitration was the possibility for a respondent to request successfully from the ICC Court that a new party join the arbitral proceedings.⁸

10.07  The ICC Court had traditionally considered that only the claimant was entitled to identify the parties to the arbitration.⁹ This was also the position of the arbitral tribunal in case 5625,¹⁰ where it was decided that only those who named themselves in the request for arbitration, or were identified as defendants in the claimants’ request for arbitration, could become parties in an ICC arbitration.¹¹ Although the award was rendered under the 1975 ICC Rules, it could also have been made under the 1998 version of the ICC Rules mutatis mutandis, if literally applied.¹² A claimant wishing to amend a request for arbitration in order to introduce a new party might therefore have had no alternative but to begin a new arbitration if the original arbitration was already so advanced as to preclude the joinder of an additional party without the consent of the others.¹³

10.08  The traditional view of the ICC Court was later moderated. Accordingly, the ICC Court might have allowed a new party to be joined in the arbitration at the respondent’s request if, and only if, two sine qua non conditions were met:

• •  the third party must have had signed the arbitration agreement on the basis of which the request for arbitration had been filed. Hence, by deciding to join the new party, the (p. 167) ICC Court was simply following the parties’ intention and will, as was expressed in their arbitration agreement;

• •  the respondent must have introduced claims against the new party.¹⁴

Moreover, to ensure that all parties had an equal opportunity to participate in the constitution of the arbitral tribunal, the request for the joinder of a new party must have been made before the arbitrators had been appointed or confirmed, unless all parties agreed to such joinder.¹⁵

10.09  However, the moderation of ICC’s traditional view was still seen as unsatisfactory. Indeed, failing any special agreement by the parties, be it in the arbitration clause or later on, neither addition of parties¹⁶ nor consolidation of proceedings was possible under the old ICC Rules.¹⁷ Derains therefore expressed the opinion that the approach of the ICC Court under the ICC Rules (1998), which required parties to the same arbitration agreement to participate in separate arbitration proceedings dealing with closely interrelated matters, was too strict.¹⁸

According to the new provision it is now clear that both claimant and respondent may request the joinder of an additional party—the text speaks of ‘a party wishing to join an additional party’—by making a request in accordance with Article 7(2) and (3) of the ICC Rules (2012). In particular, the party making the request will have to provide information about any relevant agreements and, specifically, the arbitration agreement(s).¹⁹

10.12  It is now clear from the wording of Article 7(1) of the ICC Rules (2012) that a major issue in the cases of joinder of additional parties is the composition of the arbitral tribunal; a constituted ICC arbitral tribunal will not be allowed to join a third party unless all parties agree.²²

Article 22(1)(h) expressly requires the consent of the third person to be joined as well as of the party²³ applying for a joinder.²⁴ The decision of whether to permit a joinder is taken by the arbitral tribunal which has discretion in this respect.²⁵ However, the arbitral tribunal itself may not take the initiative in joining a third party to the arbitration.²⁶ The effect of this provision is that the second party to the arbitration agreement does not have to consent expressly to the joinder, as it has done so by agreeing to the LCIA Rules.²⁷ The LCIA solution can be problematic with regard to confidentiality as an unwished third person might be joined.²⁸ Therefore, even though the arbitral tribunal’s decision acts as a ‘barrier’,²⁹ a party which does not want to have third persons in the proceeding should insist on the exclusion of the applicability of Article 22(1)(h) in writing.³⁰ However, applications based on this provision have been sparingly made and very rarely granted.³¹

10.14  Article 41(1) and (4) provide that: ‘[a] third party who has an interest in the outcome of arbitral proceedings to which these rules apply may request the arbitral tribunal for permission to join the proceedings or to intervene therein’, and ‘[t]he joinder [or] intervention . . . may only be permitted by the arbitral tribunal, having heard the parties and the third party, if the third party accedes to the arbitration agreement by an agreement in writing between him and the parties to the arbitration agreement’. Due to the fact that the requirement of a written agreement between the intervening third party and the parties to the arbitral proceedings entails that the participation of the third party will only be permitted if all parties in the arbitral proceedings agree, third party participation does not often occur in arbitral proceedings.³²

10.15  Article 4(2) of the Swiss Rules first allows for a third party to intervene in pending arbitral proceedings. Parties electing the Swiss Rules are therefore considered to have given their consent for the intervention of third parties.³³ As a consequence, none of the parties can object if a third party is willing to join the proceedings. A third party requesting to participate in a pending arbitration is thereby deemed to have fulfilled the formal and substantive (p. 169) conditions to become a party to the arbitration.³⁴ However, this of course does not mean that any third party wishing to intervene in pending arbitration proceedings under the Swiss Rules shall eo ipso become a party, as the only effect of this assumption is that the initial parties to the arbitration agreement do not have to consent expressly to the joinder, and it remains at the discretion of the arbitral tribunal to allow the intervention.³⁵ The provision, by conferring some ‘discretionary power’ to the arbitral tribunal, increases its jurisdictional power.

10.16  Moreover, Article 4(2) of the Swiss Rules also authorizes the arbitral tribunal to cause a third party to participate in the arbitration upon a request made by a party to pending arbitral proceedings. Either the claimant or the respondent can request the joinder of a third party.³⁶ The field of application of the Swiss Rules is therefore broader than that of Article 22(1)(h) of the LCIA Rules which only provides for the second type of joinder.³⁷

10.17  While in the first situation³⁸ the consent of the third party to the joinder can be implied by his request to join in the proceedings, in the second situation³⁹ the consent of the third party is necessary. This should even apply when the third party is party to the same arbitration agreement as the initial parties to the proceeding, in the case that the third party has not expressly waived his right to designate an arbitrator in the common arbitration agreement (which is quite unlikely). In fact, the Swiss Rules themselves do not provide, in the case of third parties’ participation, for a provision regarding waiver of the right to designate an arbitrator on the part of the joining third party. Indeed a waiver of the right to designate an arbitrator is only foreseen in the case of consolidation of proceedings.⁴⁰ On the other hand, the consent of the initial parties to the proceedings is given by the fact that they have submitted their dispute under the Swiss Rules. Therefore, their agreement afterwards to a specific joinder is no longer necessary.

10.18  As a general rule, it can be said that bringing into the proceedings a party to the arbitration agreement which had not initially been named party to the arbitral proceedings raises more difficulties where the arbitration is institutional rather than ad hoc.⁴¹ In the ad hoc case⁴² Marine Drive Complex v Ghana,⁴³ the claimants originally named Ghana Investment Centre (GIC) as respondent and, after arbitration had started, wanted to add a new party—the Government of Ghana—as respondent. The arbitral tribunal, considering that the Government of Ghana was bound by the arbitration clause in the agreement signed by GIC, accepted the joinder by making reference to Article 20 of the UNCITRAL Rules (1976).⁴⁴ On the other hand, an entity which is not party to the arbitration agreement should only be joined with the consent of all parties and the arbitral tribunal.⁴⁵

10.19  Because of the inherent conflict between the consensual nature of arbitration and a statutory joinder not based on consent, the different arbitration laws do not in general contain provisions dealing with the joinder of third parties or their intervention.⁴⁶ Nevertheless, Article 1696bis of the Belgian Judicial Code and Article 1045 of the Netherlands CCP confirm the possibility for third parties to intervene or be joined as parties in arbitral proceedings. However, the participation of a third party remains subject to an agreement with the parties in dispute and to the consent of the arbitral tribunal.⁴⁷

10.20  In order to decide whether the participation of a new party to an arbitration is possible or not, the consent of all parties involved is important. For this reason it is useful to distinguish whether the new party to the arbitration is also a party to an arbitration agreement that binds them all or not.⁴⁸

10.21  If the new party joining the arbitration is also party to an arbitration agreement that binds them all, the consent of the parties—that are already involved in the arbitration—to a new joining party, should be implied from the common arbitration agreement. Nevertheless, the consent of the party joining the arbitration appears to be necessary where a three-person arbitral tribunal (with two-party appointed arbitrators) is already constituted. However, this consent does not, strictly speaking, concern the joining of an additional party to the arbitration itself, because such consent is already existent on the ground of the common arbitration agreement, but rather the acceptance of the composition of the arbitral tribunal as it is. Therefore, the consent of the party joining the arbitration is not necessary where the institutional arbitration rules provide that an all-neutral three-person arbitral tribunal has to be constituted in multiparty arbitrations,⁴⁹ because in such a case the joining party would not be disadvantaged. Furthermore, the consent of the new party joining the arbitration is not necessary in countries where the principle of the equality of the parties in the appointment of arbitrators can be waived before the dispute has arisen,⁵⁰ and the new party joining the arbitration has done so.

10.22  The importance of the composition of the arbitral tribunal now comes to light in Article 7(1) of the ICC Rules (2012). Moreover, with regard to Article 22(h) of the LCIA Rules this aspect was underlined by observing that ‘it is arguably unsatisfactory that the party joined to the arbitration has no opportunity to influence the composition of the tribunal where the initial parties had the right to nominate an arbitrator . . . although, as the third party must consent to joinder, presumably he would not do so unless he were content to submit to the jurisdiction of the existing tribunal.’⁵¹

(p. 171) 10.23  On the other hand, whether or not a new party, which is not a party to a common arbitration agreement, can participate in the arbitration should depend on the consent of all parties, if the initial parties have not chosen arbitration rules which facilitate joinder.⁵² The necessity of all parties’ consent can also be inferred from the arbitration acts of Belgium⁵³ and the Netherlands.⁵⁴ The only impact of these laws therefore, is that they underline this necessity.

10.24  Consolidation denotes the act or process of uniting several arbitration proceedings which are pending or initiated into a single set of proceedings before the same arbitral tribunal.⁵⁵ The need for consolidation is often said to be most acute in maritime and construction arbitration.⁵⁶ Nevertheless, while consolidation has several advantages,⁵⁷ like prevention of inconsistent awards,⁵⁸ procedural efficiency, and the saving of time and money,⁵⁹ it also presents disadvantages,⁶⁰ such as the constitution of the arbitral tribunal,⁶¹ the distribution of costs,⁶² and issues of confidentiality.⁶³

10.25  However, probably the strongest criticism is that compelling consolidation without the consent of the parties directly involved undermines the freedom of contract that forms the basis of an arbitration agreement.⁶⁴ This aspect is, along with confidentiality, the main reason most countries have not adopted provisions on the consolidation of related arbitral proceedings. In fact, it is believed that this constitutes an infringement of the rights of the parties to have their disputes settled in private, according to their will.⁶⁵ For the same reason, arbitration institutions are rather reluctant to consolidate proceedings, without parties’ consent.⁶⁶

10.26  Consolidation of arbitrations between different parties is possible in two ways:

• •  with the parties’ consent in the arbitration agreement: the parties may have expressly agreed to consolidation by inserting a relevant provision in their agreement, implicitly, or by reference to arbitration rules;

• •  without the parties’ consent in the arbitration agreement: national arbitration laws might allow ordered consolidation.⁶⁷

10.27  Although the simplest way to facilitate consolidation is by an agreement between the parties or a special provision in the arbitration clause, such agreements are rare in practice.⁶⁸ Drafting multiparty arbitration clauses is not easy. It requires a close understanding of the nature of the relationship between the different parties, and of the type of disputes that could arise in the future.⁶⁹ Therefore, it is not surprising that none of the leading arbitration institutions have officially recommended a multiparty arbitration clause which provides for consolidation.⁷⁰ However, the issue was addressed in the IBA Guidelines for Drafting International Arbitration Clauses.⁷¹

10.28  The clauses discussed are usually based on broad notions such as ‘related disputes’ which are complicated in practice, because they lead to the question of what constitutes the necessary connection.⁷² Moreover, the clauses of all contracts involved must allow for a consolidation, as only then can the consent of all parties be considered as given.⁷³ The question of whether consolidation is possible depends ultimately on an interpretation of the various arbitration agreements and it is therefore up to the arbitral tribunal to decide whether or not to consolidate—this issue falls within the competence–competence of the arbitral tribunal.⁷⁴

10.29  An example of the problems encountered in drafting arbitration clauses which allow separate arbitration proceedings between different parties to be consolidated is given in the decision of the House of Lords Lafarge Redland v Shepard Hill.⁷⁵ In this case, which arose out of the construction of a road, the main contract between the contractor and the employer contained a standard ICE 5th Edition arbitration clause. The contractor then engaged a subcontractor under a subcontract incorporating, with amendments, the FCEC Standard Form of Subcontract.⁷⁶ Few standard forms contain agreements to consolidate arbitration proceedings with proceedings arising under other contracts: the FCEC Standard Form of Subcontract for use with the ICE Conditions with its clause 18(2)⁷⁷ is an exception.

10.30  In interpreting the procedure anticipated under clause 18(2), the Court of Appeal in the Lafarge Redland v Shepard Hill case concluded that a tripartite arbitration was envisaged.⁷⁸ The problem involved in this interpretation and clearly seen by the Court of Appeal was that the employer under its contract with the general contractor could not be forced to take part in the proceeding (p. 173) since the arbitration clause did not contain such an obligation.⁷⁹ This interpretation was upheld by the majority in the House of Lords.⁸⁰

10.31  As express contractual provisions for multiparty arbitration are relatively rare, the question arises as to which situations in an arbitration clause can be interpreted as encompassing an agreement to multiparty arbitration, ie in which cases can an implied agreement be said to exist?⁸¹ It may be possible to interpret less explicit arbitration clauses as permissive of consolidation of proceedings:

• •  if all contracts concluded in connection with a single economic venture between the different parties involved contain identically worded arbitrations clauses; or

• •  if the heads of agreement of a specific project contains an arbitration clause to which the different contracts concluded in the execution of this heads of agreement refer.⁸²

Both situations may be an indication of consent for consolidation. However, the mere fact of identical wording is not itself conclusive for permission for consolidation.⁸³

10.32  The question of multiparty arbitration on the basis of different arbitration clauses arose in the Andersen arbitration where, in spite of different versions of arbitration agreements, the arbitral tribunal affirmed its jurisdiction in an interim award rendered on 29 April 1999 by ruling that all the parties were bound by the most recent arbitration clause.⁸⁴ This conclusion was upheld by the Swiss Federal Tribunal on an application to set the award aside.⁸⁵ However, the Andersen case was peculiar insofar as the arbitration clauses were different because many of the parties had not updated their contracts so as to include the most recently approved arbitration clause.⁸⁶

10.33  Generally, differences in such substantial matters as the chosen seat or the applicable law should exclude consolidation.⁸⁷ Even where all contracts involved are concluded within the framework of the same venture between the various parties involved, the arbitral tribunal cannot assume a global jurisdiction for all contracts concluded for that venture, but has to verify its jurisdiction in relation to each party and to each issue.⁸⁸ This was clearly held by the Court of Appeal of Versailles in the Sofidif case.⁸⁹

10.34  Recourse to administered arbitration appears to be the most suitable means to reach a dual goal:

• •  consolidation, whenever opportune and/or necessary, of separate proceedings;

• •  harmonization of the said proceedings, when consolidation is to be discouraged.⁹⁰

10.35  By inserting careful provisions into the respective rules, the arbitration institutions can put into operation a true ‘contractual system of consolidation and/or harmonisation’, therefore filling (p. 174) the gap created by the contractual foundation of arbitration, as opposed to the coercive measures available at the level of procedural law.⁹¹ Consolidation in institutional arbitration presupposes that the different proceedings are administered by the same institution, and it is possible in two ways:

• •  the parties may agree to the joinder of proceedings; or

• •  consolidation may be ordered, in certain cases, by the arbitration institution to whose rules the parties have adhered in their arbitration agreement or by the arbitral tribunal appointed in accordance with those rules.⁹²

While the LCIA Rules make no reference to the possibility of consolidation of arbitration between different parties, several other arbitration rules—most recently the ICC Rules (2012)—have adopted provisions in this regard.

10.37  In accordance with Article 12 of the CEPANI Rules consolidation can be ordered by the institution (the Appointments Committee or the Chairman of CEPANI). The request for consolidation can come from the arbitral tribunal, from the parties or the most diligent party, or CEPANI itself. Within the framework of the CEPANI Rules, consolidation is possible, even though the parties to the different disputes are not the same in whole or in part.⁹⁶ CEPANI’s approach requires only some link of connection or indivisibility of the disputes.⁹⁷

10.38  The Swiss Rules provide in Article 4(1) that the Chambers may decide that a new case shall be referred to the arbitral tribunal already constituted for the existing proceedings. By choosing the Swiss Rules and, in particular, Article 4(1), the parties are deemed to have given their consent to consolidation in advance.⁹⁸ It is not a condition for the consolidation of different proceedings under the Swiss Rules that the proceedings to be consolidated are between the (p. 175) same parties,⁹⁹ as the consolidation can also be ordered when the new case involves different parties than those in the existing arbitral proceedings.¹⁰⁰ Therefore, there is an expansion of the scope of arbitration ratione personae, as the initial parties give their consent in advance to arbitration as the mechanism to be used to solve disputes in general, and not only for solving those with regard to a particular identified party.¹⁰¹ It has been observed that consolidation can be ordered despite the objection of one party.¹⁰² Consequently, with this provision some ‘discretionary power’ is conferred upon the institution and a strengthening of the jurisdictional side of arbitration takes place.

10.39  Article 44 of the Japanese Commercial Arbitration Association (JCAA) Rules grant both an arbitral tribunal and the JCAA (institution) power to ‘consolidate multiple requests for arbitration that contain claims that are essentially and mutually related’, provided that either all relevant parties consent or that ‘multiple requests for arbitration arise out of the same agreement’. In the latter case, no specific consent by the parties to consolidation is required.¹⁰³

10.40  The Construction Industry Model Arbitration Rules (CIMAR) which are intended for use with arbitration agreements under the English Arbitration Act 1996 reflect the terms of this Act. Indeed, the CIMAR require in rule 3.9 the express consent of all the parties. Moreover, consolidation can only take place when the same arbitrator is already appointed in two or more arbitral proceedings which involve some common issues.

10.41  If no agreement exists between the parties, consolidation can be based on the law governing the arbitration.¹⁰⁴ Statutory regulation of consolidation started to be adopted after the appearance of the UNCITRAL Model Law in 1985; before this, consolidation was only really known in the United States.¹⁰⁵ The solutions in the few countries which have enacted legislative provisions can basically be divided into two categories: the ‘false’ and the ‘real’ legislative solutions.¹⁰⁶

10.42  The ‘false’ legislative solutions are closer to consensual rather than to legislative consolidation, because they require the consent of all the parties as a condition for consolidation.¹⁰⁷ An example of such a solution is section 35 of the English Arbitration Act 1996. Section 35 states the position at common law: consolidation is only possible with the consent of all the parties involved, but not otherwise. This section recognizes that arbitration is a voluntary process and the parties may agree that the proceedings can be ‘consolidated’ or be the subject of concurrent hearings.¹⁰⁸ However, in the absence of an agreement, the arbitral tribunal has no power to order consolidation against the will of a party, and the Act contains no power for the court to order consolidation.¹⁰⁹

(p. 176) 10.43  Despite a strong body of opinion that some form of consolidation should be permitted, even without the consent of all concerned,¹¹⁰ the DAC concluded that such a provision should not be included in the English Arbitration Act 1996, because it was felt that neither consolidation nor concurrent hearings could be reconciled with party autonomy and the right of any party to have its dispute resolved by the tribunal of its choice.¹¹¹ Furthermore, compulsory consolidation would involve an infringement of the principle of confidentiality inherent in a choice of arbitration.¹¹²

10.44  The ‘real’ legislative solutions allow the courts to compel consolidation as they are based on the intervention of the lawmaker and not only the will of the parties.¹¹³ An example of a ‘real’ legislative solution is Article 1046 of the Netherlands CCP. Another was section 6B of the Hong Kong Arbitration Ordinance 1997.¹¹⁴

10.45  Article 1046 of the Netherlands CCP provides that any party of two or more connected arbitral proceedings which are pending before different arbitral tribunals¹¹⁵ in the Netherlands¹¹⁶ may request a court-ordered consolidation of the proceedings, unless the parties have agreed otherwise. In the Dutch provision the consent of the parties is presumed, but they have the possibility to opt-out.¹¹⁷ According to Sanders, this has been criticized, and indeed, an opt-in solution would have been more in line with the requirement of consent of the parties.¹¹⁸ However, it is enough that one of the arbitration agreements excludes consolidation to prevent consolidation.¹¹⁹ Must such a clause necessarily be explicit, or can it be implicit, for instance in that the rules of the concerned arbitration institutions do not provide for consolidation? In the case of the Netherlands it seems that implied terms are not enough to justify an exclusion of consolidation.¹²⁰ In fact, the standard arbitration clause of the NAI Arbitration Rules—arbitration rules which do not contain provisions with regard to consolidation—provides for an optional clause to exclude consolidation.¹²¹ The President of the District Court of Amsterdam¹²² has discretionary power, and may order full¹²³ or partial¹²⁴ consolidation.¹²⁵

10.46  Section 6B of the Hong Kong Arbitration Ordinance (1997) gave the High Court wide powers to order related arbitration proceedings to be consolidated, albeit only in relation to (p. 177) domestic arbitrations.¹²⁶ Therefore, consolidation by the court was not available where one contract provided for domestic arbitration while a related contract provided for international arbitration conducted under the Model Law.¹²⁷ However, although there was a different system for international cases, the Ordinance permitted the parties to an international arbitration to opt-in to the domestic regime in writing.¹²⁸ While courts have considered the provisions of section 6B in a number of cases, section 6B was relatively infrequently used,¹²⁹ and in many cases where this power was applied, a formal order to consolidate was not made, but both arbitrations were ordered to be heard at the same time.¹³⁰ Cases in which section 6B was applied were the Shui On cases,¹³¹ and Linfield Limited v Brooke Hillier Parker and others.¹³² The new Hong Kong Arbitration Ordinance (2010)—which has created a unitary regime for domestic and international arbitrations—permits the parties to ‘opt in’ for consolidation—section 2 of Schedule 2—giving to the court the power to consolidate arbitrations where certain conditions are satisfied.¹³³

10.47  The Australian International Arbitration Amendment Act 1989, section 24 (an optional provision)¹³⁴ provides that parties may agree in writing that one of them may apply to an arbitral tribunal for an order to consolidate. In Australia¹³⁵ we therefore find, exceptionally, tribunal-ordered instead of court-ordered consolidation.¹³⁶ In this kind of consolidation, a distinction is drawn between related proceedings before the same arbitral tribunal and the case where two or more arbitral tribunals are involved.¹³⁷ Section 24, an opt-in provision, regulates both cases¹³⁸ in detail.¹³⁹ The difference between an opt-in provision and the regulation of the English Arbitration Act 1996 is that in the English Arbitration Act the consent of all parties concerned by a specific consolidation is necessary, while in the first type of provision, all parties of a particular arbitration agreement give their consent in advance by opting-in to the possibility that any consolidation can be ordered when the consolidation requisites are fulfilled. However, in the Australian solution, consolidation is not possible where the parties of the related arbitration have not given their consent to consolidation.

10.48  The New Zealand Arbitration Act 1996¹⁴⁰ follows the Australian approach, but falls back on court-ordered consolidation if the same arbitral tribunal refuses or fails to make an order of consolidation, or two or more arbitral tribunals cannot reach an agreement.¹⁴¹

10.49  The FAA does not contain any provision regarding consolidation.¹⁴² Lower US courts have reached divergent outcomes in cases involving requests for court-ordered consolidation of two or more arbitrations.¹⁴³ Indeed in the beginning, some lower US courts held—the seminal decision in this line was Compania Espanola de Petroleos, SA v Nereus Shipping decided by the Second Circuit¹⁴⁴—that the FAA contains an implied grant of authority permitting courts to order the consolidation of separate arbitrations—even if the parties had not agreed to allow court-ordered (or other) consolidation.¹⁴⁵ Yet the Nereus case no longer represents the law in the United States. The lower courts—including the Second Circuit—now reject the conclusion reached in the Nereus case, instead holding that the FAA does not authorize the consolidation of multiple arbitrations in the absence of the parties’ agreement to such consolidation.¹⁴⁶

10.50  However, some US States have enacted statutes that expressly provide for court-ordered consolidation of related arbitrations,¹⁴⁷ in some cases even where the parties’ agreement excludes consolidation.¹⁴⁸ Moreover, the Revised Uniform Arbitration Act (RUAA) 2000, which is intended to apply to arbitrations of both international and domestic disputes held in each US State that enacts the new law, contains a statutory consolidation provision—section 10(a)—granting courts in the arbitral seat power to order consolidation (even absent agreement by the parties) in specified circumstances.¹⁴⁹ All US States that have adopted the RUAA have adopted section 10(a) unchanged.¹⁵⁰ The parties may nevertheless deprive the courts of this power by agreeing that arbitrations under a particular agreement may not be consolidated with other arbitrations¹⁵¹ (possibility to opt-out). Furthermore, a further restriction on the possibility of consolidation is given in section 10(a)(4) of the RUAA.¹⁵²

10.51  It has been underlined that ‘to the extent that state law consolidation rules provide for consolidation notwithstanding the parties’ contrary agreement, they would be preempted by the FAA (and the New York and Inter-American Conventions), which require enforcement of the parties’ arbitration agreement in accordance with its terms’.¹⁵³

10.52  Without doubt, the question of parties’ consent is essential to the issue of consolidation of arbitral proceedings between different parties. However, often the discussion and the proposed or implemented solutions reflect quite opposite views. In the Netherlands, the consent of (p. 179) the parties to court-ordered consolidation seems to be presumed by the choice of the seat of arbitration in that country,¹⁵⁴ whereas in England, the Arbitration Act 1996 provides that no consolidation is possible without the express consent of all the parties.¹⁵⁵

10.53  The issue of consolidation should be solved primarily in institutional arbitration rules.¹⁵⁶ By incorporating the arbitration rules the parties’ may consent to consolidation. Nevertheless provisions in national arbitration laws might be useful in cases where the arbitration agreements refer to different institutional rules, or where one of the arbitrations is an ad hoc arbitration. In the case of national arbitration laws providing for consolidation, opt-in provisions better correspond with the requirement of parties’ consent than opt-out ones.¹⁵⁷ Indeed, with opt-in provisions the parties are consciously selecting the same national arbitration law—providing for consolidation provisions—in different, but possibly related, arbitration agreements. The requirement of consent is particularly important, because when different arbitral proceedings are consolidated by applying a provision contained in a national arbitration law, it is not only the composition of the arbitral tribunal that might change, but also the relevant arbitration rules applicable to the proceedings.

10.54  Most of the objections raised against consolidation of arbitrations arising out of separate contracts involving different parties are not relevant to the consolidation of multicontract arbitrations in a two-party context.¹⁵⁸ In particular, in bi-party arbitrations no confidentiality issues arise, because no third party is involved.¹⁵⁹ Also the problems regarding the appointment of arbitrators are significantly reduced, because the parties do not generally lose their right to appoint a different arbitrator themselves.¹⁶⁰ Finally, difficulties concerning unjust apportionment of fees do not occur either.¹⁶¹ When arbitrations between the same parties are to be consolidated, parties’ consent appears therefore to be less imperative.

10.55  Agreeing with Leboulanger, where there are different arbitrations between the same parties the principle of ‘autonomie de la volonté’ should be soothed by mandatory principles such as the proper administration of justice, the equal treatment of parties, adversarial proceedings, and the rights of defence—all of which are part of international public policy as conceived by most national legal systems and by the law of international arbitration.¹⁶² Joinder of parallel arbitral proceedings between two parties bound by interrelated agreements should therefore be seriously considered by arbitration institutions and introduced into their rules so that complex arbitrations dealing with multi-contracts become more efficient and meet the parties’ legitimate expectations.¹⁶³ Currently, the conditions vary from one arbitration institution to another.

The circumstances to be taken into account by the ICC Court in deciding whether to consolidate are the same as for consolidation of arbitrations between different parties.¹⁶⁵

10.57  Like Article 4(6) of the ICC Rules (1998) Article 10(c) of the ICC Rules (2012) permits consolidation only if requested by a party, if the two (or more) arbitrations are proceeding under the ICC Rules in connection with the ‘same parties’, and if the arbitrations arise from the same ‘legal relationship’.¹⁶⁶ The condition of arising from the same legal relationship is clearly also fulfilled when all of the claims in the arbitrations between the same parties are made under the same arbitration agreement (Article 10(b) of the ICC Rules (2012)).

10.58  While the consent of all of the parties is not required, the ICC Court has generally been reluctant under Article 4(6) of the ICC Rules (1998) to order the joinder of two arbitrations against the objection of a party.¹⁶⁷

10.59  The Swiss Rules¹⁶⁸ and the CEPANI Rules¹⁶⁹ make no differentiation between consolidation of arbitrations between different parties and consolidation of arbitrations between the same parties. Therefore what is written for consolidation of arbitrations between different parties is also true here.¹⁷⁰ In the case of the Swiss Rules the Chamber for the decision of consolidation will ‘take into account all circumstances, including the links between the two cases and the progress already made in the existing proceedings’. In the case of the CEPANI Rules the contracts containing a CEPANI arbitration clause have to lead to disputes that are ‘closely related or indivisible’.

Under the SCC Rules (2010) the possibility of consolidation therefore only exists where the two arbitrations involve the ‘same parties’ and where the two arbitrations concern the same ‘legal relationship’.¹⁷¹

10.61  Normally, it is impossible to consolidate multi-fora disputes when some of the parties have concluded arbitration clauses and others have not—unless all the parties agree.¹⁷² However, in spite of a jurisdiction clause, the parties to court proceedings can agree to resolve their dispute by arbitration, even after the dispute has arisen. This can be done expressly, in the form of a submission agreement, or implicitly.¹⁷³ Moreover, in addition to the agreement of the parties to court proceedings that their disputes should be solved through arbitration, all the parties involved must agree to consolidate the related proceedings into a single arbitration.¹⁷⁴ Such an agreement can be made by the parties expressly or implicitly.¹⁷⁵

10.62  In the consolidation of arbitral proceedings and court proceedings two levels of examination have therefore to be distinguished:

• •  the first level regards the decision of the parties to court proceedings about the method by which the dispute has to be solved (before a court, or before an arbitral tribunal);

• •  the second level concerns the consolidation of the related proceedings.

10.63  In the first level the consent of the parties to court proceedings—whose method for the resolution of the dispute will change—is indispensable. In fact they have to consent to arbitration. In the second level, one should differentiate between the parties that decide that their dispute is now to be solved through arbitration instead of in court proceedings (group A), and the parties of the related arbitration (group B). While for group B the consent to consolidate the related proceedings is necessary, for group A the answer to the question of consent to consolidation is less obvious. Indeed, since parties’ consent is normally not necessary for consolidation of court proceedings, the fact that group A’s parties had initially chosen that national courts should solve their dispute, could at least be seen as an implied agreement to consolidate the related proceedings. This is even truer when the parties of group A decide to submit their dispute to arbitration under institutional rules which provide for consolidation, or to arbitration having its seat in a country whose national legislation provides for consolidation, instead of the initially chosen court proceedings.

10.64  In light of the difficulties raised by consolidation of proceedings, the practice has searched for other solutions to this issue of multiparty arbitration; these solutions seek to synchronize the different arbitrations.¹⁷⁷ The advantage of practical consolidation is that it is more respectful with regard to parties’ consent to arbitration.

10.65  One possible way of harmonizing related proceedings is to appoint the same arbitrators in the different arbitrations.¹⁷⁸ While ideally the arbitration agreements themselves provide that the same arbitrators should be appointed in all related arbitrations, the English Court of Appeal has expressed its willingness to appoint the same arbitrator for different arbitrations arising out of contracts concluded for a common purpose, even in the case that such agreements (p. 182) do not exist.¹⁷⁹ In the Adgas case,¹⁸⁰ the Court of Appeal held that, whilst it had no power to consolidate the two proceedings, it could, as appointing authority, appoint the same (sole) arbitrator for both cases.¹⁸¹ Lord Denning stated that it seemed to him ‘highly desirable that it should be done so as to avoid inconsistent findings’.¹⁸² However, the disputing parties did not agree to join the proceedings and the hearings took place separately.¹⁸³ Yet, in the first Shui On case,¹⁸⁴ Hong Kong’s High Court expressed concern about the possibility of inconsistent decisions, even from the same sole arbitrator, if the proceedings are tried separately.¹⁸⁵ This can happen, if different witnesses testify, or the same witnesses testify differently in the two successive proceedings where one of the parties may not be present.¹⁸⁶

10.66  Appointing the same arbitrator(s) in related proceedings is easier when the arbitration agreements do not call for diverse modes of arbitration, and when the disputes are to be decided by a sole arbitrator. However, there may be considerable problems when the arbitrators of a tribunal are not appointed by the same appointing authority¹⁸⁷ but by the parties.¹⁸⁸ In fact, conflicting decisions will primarily concern the party which is involved in both arbitrations, while the other parties may give more weight to their right to nominate or appoint an arbitrator in whom they have confidence.¹⁸⁹ It seems more realistic therefore to have the same president for the arbitral tribunals of the different proceedings—one who has the responsibility to assure the coordination of the different arbitrations.¹⁹⁰

10.67  Another possible way of harmonising related proceedings is to hold concurrent hearings. This is expressly provided in section 2(1)(d)(ii) of Schedule 2 to the Hong Kong Arbitration Ordinance (2010) which states that the court may order related arbitration proceedings ‘to be heard at the same time, or one immediately after another’.¹⁹¹ Section 35 of the English Arbitration Act, on the other hand, only recognizes that the parties may agree that the proceedings shall be the subject of concurrent hearings. However, in the absence of such an agreement between the parties the arbitral tribunal has no power to order concurrent hearings.¹⁹²

10.68  Some arbitration rules also provide for concurrent hearings. Article 14(b) of the LMAA Terms, for instance, enables arbitrators to order the concurrent hearings of arbitrations where common issues of fact or law appear to be raised, even where the arbitral tribunals are not identical.¹⁹³ (p. 183) The said provision also regulates the admissibility of evidence used in one set of proceedings in other proceedings.¹⁹⁴

10.69  The Supreme Court of New South Wales in Aerospatiale v Elspan and others¹⁹⁵ even considered extending concurrent hearings to cases where the arbitration proceedings were parallel to court proceedings; this was in respect of an arbitrator appointed as referee to be heard and to report to the court upon associated matters in dispute between the parties to the arbitration, and additional parties.¹⁹⁶ Such an extension of the possibility to hold concurrent hearings may raise issues related to the privacy of arbitral proceedings¹⁹⁷ and confidentiality.

10.70  A further solution is to stay one set of proceedings until the other has been terminated. This allows the arbitral tribunal in the second arbitration to consider the solution reached in the first arbitration.¹⁹⁸ However, this solution has the disadvantage that it delays the resolution of the dispute in the second arbitration, and it may breach the privacy and confidentiality of the arbitration process.¹⁹⁹

10.71  In the commodity trade, the seller may make a contract with a purchaser who then passes the product down a line of intermediaries, until it reaches the last buyer in the chain or ‘string’ to whom the goods are physically delivered.²⁰⁰ All contracts are identical except for the parties and the price, and they all refer to the same set of arbitration rules.²⁰¹ Disputes as to quality and condition of the product do not have to be arbitrated up the chain in a number of arbitrations, but rather the recipient of the goods can bring the arbitration against the original seller.²⁰² The resulting award will bind all other parties and thus prevent conflicting decisions within the chain and save money and time. A similar approach can also be found in certain maritime arbitrations.²⁰³ However, procedures of this type are only likely to work effectively between members of the same trade who are accustomed to the practice, are used to dealing with each other, and have a common interest in the quick and efficient settlement of disputes.²⁰⁴

10.72  The most obvious basis for a refusal to recognize and enforce an award of an arbitration to which a third party was joined or in which two or more disputes were consolidated is the (p. 184) absence of an appropriate arbitration agreement between the parties.²⁰⁵ However, the New York Convention also allows a court to refuse recognition and enforcement of an award if a party was unable to present its case,²⁰⁶ or if the composition of the arbitral tribunal or the procedures were not in accordance with the agreement of the parties.²⁰⁷

10.73  Normally, if all parties have agreed on the joinder of a third party or the consolidation of arbitrations, the award should be enforceable.²⁰⁸ In particular, consent should be considered to have been given when the parties submit their disputes to institutional arbitration rules which allow for consolidation and/or for joinder.²⁰⁹ Nevertheless, in the case of joinder the third party clearly has to agree to be joined in the arbitral proceeding, if he is not already a party to the arbitration agreement.

10.74  While ordered consolidation based on opt-in legislative provisions should not pose problems with regard to the awards’ recognition and enforcement, the legal standing in the case of ordered consolidation based on opt-out legislative provisions is less clear.²¹⁰ Indeed, a provision like Article 1046 of the Netherlands CCP is more difficult to reconcile with the New York Convention than an opt-in statutory provision in the national arbitration law. Therefore, as in the case of an opt-out provision like the Dutch one the situation regarding recognition and enforcement under the New York Convention is not clear, the parties should be encouraged whenever possible to record their agreement to consolidation of arbitrations or joinder of third parties.²¹¹