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Part II Consent in commercial arbitration, 9 Extension of Consent to Arbitration

From: Consent in International Arbitration

Andrea Marco Steingruber

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 06 June 2023

Arbitral agreements — Arbitral tribunals — Conduct of proceedings

(p. 144) Extension of Consent to Arbitration

9.01  This chapter gives an overview of the issue of extension of consent to arbitration. The widely used concept of extension is in some ways a misleading concept, because decisions accepting the substitution of one party for another or the addition of a non-signatory party to the arbitration proceedings1 are regularly based on consent.2

9.02  The chapter first discusses the extension of consent to arbitration by application of general principles of contract law or corporate law (Section A). Later the chapter considers extension of consent to arbitration to non-signatories (Section B), where aspects related to consent by conduct3 will also be looked at.

A.  Extension of Consent to Arbitration by Application of General Principles of Contract Law or Corporate Law

9.03  The United States have always followed—together with France—a strong contractual approach with regard to arbitration.4 Due to the fact that in the United States ‘arbitration agreements (p. 145) are to be treated like other contracts, subject to the policy favouring arbitration’, general principles of contract law—including third party principles—apply to arbitration agreements in the same way that they apply to contracts in general.5 However, in other common law countries and in civil law systems, general principles of contract law are also used for extending arbitration agreements. Principles of contract law include agency, assignment, subrogation, universal succession, and third party beneficiaries. These principles, when applied to arbitration agreements, give rise to issues with regard to consent to arbitration.

1.  Agency and consent

9.04  Under the general principles of contract law, it is the person in whose name and on whose behalf the contract was made, rather than the agent or representative, who will be bound by all the rights and obligations deriving from the contract.6 An arbitration clause entered into by a person acting, expressly or implicitly, as the agent of a principal, and within the limits of his authority, is therefore generally directly imputable to the non-signatory principal.7 Conversely, an agent who discloses his agency is, in principle, not bound by the arbitration agreement.8

9.05  The situation is more complex when the main contract concluded by an agent contains an arbitration clause. The key issues with agency are whether the principal must provide the agent with specific authorization to enter into an arbitration clause, as opposed to the general authorization to conclude the substantive contract, and, in the affirmative, the question of which form the specific authorization has to take.9 Another issue closely related to consent is about what happens when the agent exceeds his powers. Moreover, in the United States agency is conceived in a broader sense.10

1.1  Form requirement and consent

9.06  There is great diversity regarding the authority and form requirements necessary to agree to arbitration on behalf of another person.11 Several laws require explicit or special authority,12 some the written form or the form necessary for the transaction envisaged (ie the arbitration agreement), which is tantamount to requiring the written form,13 while others pose no requirements of form.14 Conversely, it is generally agreed that the New York Convention does not pose any requirement of form on this subject.15

9.07  It has been observed that the relaxation of the protective element in the form requirements brings good reasons to allow oral conferrals of power on an agent, especially where the agent is authorized to enter into the contract on behalf of the principal.16 However, this leads to more incertitude. On the other hand, the importance of the issue of consent to arbitration by the non-signatory increases. Indeed, where an agreement containing an arbitration clause has been entered into by a person who expressly or impliedly did so as a representative of a principal, that (p. 146) non-signatory principal may be bound to the arbitration agreement.17 While in agency’s cases, where there is a formal representation or a subsequent ratification by the principal, the principal will normally have consented to arbitration, issues with non-signatories arise—in particular in the case of apparent agents.

1.2  Agent exceeding the scope of delegated powers

9.08  If the agent acts outside the scope of his mandate, or does not disclose his capacity as agent, then the question of who is bound by the arbitration agreement arises.18

9.09  Due to the fact that agency relationships are often not explicit, the courts and tribunals are regularly dealing with undisclosed or apparent agents, ie situations where a principal is not willing to be represented or is not aware of a representative, but a third party’s legitimate reliance in such representation is protected.19 In these cases there is no consent of the principals to arbitration. Therefore, to warrant an extension of the arbitration clause vis-à-vis the principal, the ‘appearance’ upon which the counterparty of the undisclosed agent relies must reach a certain threshold.20 On the other hand, the undisclosed agent may be compelled to arbitrate, not based on agency, but by application of other theories, such as the theory of appearance or estoppel.21

1.3  The position of the agent in the case of arbitration on the side of the principal in the United States

9.10  An agent that executes a contract on behalf of a disclosed principal will not normally be compelled to arbitrate against its wishes;22 however, in some US circuits,23 a non-signatory agent may be permitted to compel arbitration based on an arbitration agreement contained in the contract the agent signed in his capacity as a corporate director, officer, or employee where he would otherwise be required to defend the claim in court.24 It has been remarked that this highly pragmatic approach to agency theory sometimes also becomes expressed in terms of other theories, eg that the signatory is estopped from denying that the arbitration provision applies to the non-signatory agent25 or that the agent has, by his behaviour, assumed the duty to arbitrate.26

2.  Transfer of arbitration agreements and consent

9.11  The transfer by the original party to a contract, which contains an arbitration clause, of its substantive claims, rights, and/or obligations to another person, often raises the question of whether the transferee will be bound by the arbitration clause, contained in the main contract, (p. 147) and in the affirmative under what conditions.27 Transfers of rights and obligations may occur under different legal constructs.28

2.1  Assignment

9.12  Also at the heart of the problems which can arise in cases of assignments29 is the fact that arbitration is a consensual process.30 Originally the transfer of arbitration agreements by way of assignment was disputed, but the position has now changed and it is universally accepted that arbitration agreements are as assignable as any other contract.31 On the other hand, issues come up because of the ‘in writing’ requirement requested by the New York Convention and most national arbitration laws.

The principle: automatic assignment

9.13  Parties are, in general, free to assign their contractual rights to a third party. Where those rights are covered by an arbitration agreement the prevailing view in international arbitration is that the assignee automatically becomes a party to the arbitration agreement; indeed courts in various countries, such as France,32 England,33 Sweden,34 Switzerland,35 and Germany,36 have consistently held that the assignee can sue and be sued under the arbitration agreement.37 The Paris Court of Appeal went as far as considering it a general principle of arbitration law.38

9.14  Yet, the rule of automatic transfer of arbitration clauses is not unanimously accepted. Indeed, there have been cases where tribunals and courts have rejected the idea of an automatic transfer of the arbitration agreement,39 and required an express approval by the assignee or the original debtor as a precondition for the transfer of the right to arbitrate.40 In particular, Italy is an exception to the general consensus favouring transfer in the event of the assignments of rights.41 The two main arguments which are usually suggested against the automatic transfer are the (p. 148) principle of separability42 and the view that arbitration clauses do not only provide for rights but also contain burdens.43

Necessity to comply with the written form requirement

9.15  The New York Convention requires an arbitration agreement to be ‘in writing’ and ‘signed’ by the parties or contained in an exchange of letters or telegrams’, but it does not explicitly answer the question of whether an assignment of an agreement automatically includes assignment of the arbitration clause.44 While most national arbitration laws also require that the arbitration agreement be in writing, national courts have generally held that an automatic transfer of the arbitration clause does not violate the in writing requirement by arguing that the requirement addresses merely the initial conclusion of the arbitration agreement, but not subsequent transfers.45 Such an approach, which has also been criticized,46 would have the advantage in that there is no possibility of conflict in this respect with the substantive validity of the arbitration agreement (the reached mutual consent). However, other issues arise with regard to consent.

The issue with consent

9.16  The issue with consent concerns the positions of the assignee and of the obligor.

With regard to the assignee

9.17  Although one might object to the automatic transfer by invoking the principle of autonomy (separability),47 according to which the fate of the main contract and of the arbitration clause are not bound,48 autonomy—which concerns the respective validity of the two agreements—is not an obstacle to the second contract being a functional accessory to the first. In fact, to be a functional accessory justifies its automatic transfer.49 General consent of the assignee to assume the main contract is therefore sufficient for the contained arbitration clause to be transferred as well.50

9.18  French courts have long since held that, in the absence of an agreement to the contrary, the transfer of rights and duties resulting from a contract includes the transfer of the arbitration clause, which is a part of the terms and conditions of such contract, so that the assignee is bound by the arbitration clause.51 They justify this solution either by the accessory character of the arbitration clause, or by the presumed will of the parties to the assignment, or again by interpretation of such will.52

9.19  Conversely, it has also been argued that the presence in arbitration agreements not only of rights but of duties (eg to refrain from instituting ordinary court proceedings) precludes any (p. 149) valid transfer of an arbitration clause to the assignee unless the latter expressly agrees to be bound by those duties.53

With regard to the obligor

9.20  The obligor had agreed to arbitrate with the assignor, but not with the unknown assignee. While in practice it is not possible to force a party to the arbitration clause to arbitrate with a third party, French authors and courts have overcome this difficulty by either a presumption of consent or considering that the arbitration clause is firmly bound to the contract and thus should follow it.54

9.21  On the other hand, no automatic transfer takes place when the parties have excluded an assignment of the arbitration agreement,55 or if it results from the circumstances that the clause was concluded intuitu personae.56 Moreover, non-assignment clauses in relation to the substantive right are often considered to exclude any assignment of the arbitration agreement.57 While these cases are obstacles to the transfer of the arbitration agreement, this will, however, be the case only exceptionally in international trade where arbitration is viewed favourably, and constitutes a common mode of dispute resolution.58 Nevertheless, the assignment should not lead to a deterioration of the original debtor’s position.59

The rationale behind automatic assignment

9.22  The reason for the automatic assignment is that arbitration agreements are not personal covenants60 but form part of the economic value of the assigned substantive right.61 Indeed, the prevailing view today is that they are entered into because of non-personal reasons, such as expediency, cost-efficiency, and other perceived advantages of the arbitration process.62 Moreover, as the Court of Appeal of New York stated in Hosiery Mfg Corp v Goldston, arbitration contracts would be of no value if either party could escape by assigning a claim subject to arbitration between the original parties to a third party.63 Otherwise, it would be possible for a party to circumvent the arbitration agreement by assigning the main claim.64 An exclusion of the possibility of assignment may, however, exist where the agreement to arbitrate is entered into on the basis of a special personal relationship.65 Indeed, in such a case there should be a presumption that there is no consent to arbitrate with a third party on the part of the obligor. Moreover, an award rendered in application of Swiss law66 also considered that an arbitration agreement combined with a confidentiality clause was concluded intuitu personae and, therefore, could not be assigned without the agreement of the other contractual party.67

(p. 150) 2.2  Subrogation by operation of law, third party beneficiaries, and universal succession

9.23  The rule of automatic transfer will equally apply to other forms of transfer of arbitration agreements, such as subrogation by operation of law, universal succession, third party beneficiaries.68

Subrogation by operation of law

9.24  Subrogation by operation of law apparently does not lead to the same difficulties as contractual assignment. It has been generally recognized, particularly in France,69 that it extends to the arbitration agreement so that the subrogated party is subject to it and benefits from it.70 The same is also true according, for instance, to the practice of the Swiss71 and English72 courts.73

Universal succession

9.25  It is commonly recognized that the universal successor is bound by the arbitration clause concluded by the person whom he succeeds, under the reservation of an agreement to the contrary, in particular where such a clause had a strictly personal character.74 Other cases of universal succession, such as takeovers, merger of companies, or the acquisition of the assets and liabilities of a company, cause the transfer of the arbitration agreement to the new owner or the new combined company in the case of a merger.75

Third party beneficiaries

9.26  Broadly speaking, the third party beneficiary doctrine provides that in certain circumstances a non-signatory who has received benefits under the main contract is entitled to request performance of those benefits.76 It has been observed77 that while the US case law on ‘third party beneficiary’ is surprisingly inconsistent, in general ‘the mere status of the third party beneficiary imposes no duty to arbitrate . . . [however] doing so is a condition to the third party beneficiary’s enforcing its rights’ under that contract,78 ie the third party beneficiary is only bound to arbitrate where it is the claimant in a claim relying on the main agreement.79 In keeping with the general US contract approach, the third party must be an intended beneficiary, although evidence of this may be drawn from the writing itself and the surrounding circumstances.80

9.27  In England, section 8 of the Contracts (Rights of Third Parties) Act 1999 extended the arbitration clause contained in the contract to the third party beneficiary of a substantive term of that contract, so that the third party can enforce the term against the promisor through arbitration.81 The latter can reciprocally invoke the agreement to obtain a stay of proceedings (p. 151) brought against him before the courts.82 Interestingly, the drafters moved from an initial position of considering it inappropriate for the statute to apply to arbitration provisions as this would impose ‘duties and burdens’83 on a third party, to instead viewing the arbitration agreement as a ‘condition’ to enforcing the ‘benefit’ conferred by the third party beneficiary doctrine.84

9.28  By contrast, the French Cour de Cassation denied the transfer of the arbitration agreement in favour of a third party beneficiary for the reason that such a clause can merely create rights and not duties.85 Without contesting this result, Goutal inferred that the beneficiary could opt for arbitration without being thereby bound.86

Benefiting from the arbitration agreement because of an operation of law: the relationship with consent

9.29  The three situations discussed previously may, at first glance, seem quite similar, for the third party, to mandatory arbitration, as the third party is subject to and benefits from the arbitration agreement because of an operation of law and not because of its direct consent. Therefore, the discussion on whether the arbitration clause has to be seen as a burden or not is understandable. Jarrosson, however, observed that an arbitration clause is not strictly speaking a burden, but rather a part of the rights stipulated in favour of the beneficiary and binding on the latter once he has accepted them.87 Therefore, in this indirect way the third party gives its consent to arbitration. On the other hand, while the other party has consented to arbitration as a dispute resolution mechanism, its consent was to arbitrate with the original party and not with the third party. Nevertheless, when concluding the arbitration agreement the other party should have been aware of the possibility that the arbitration agreement could pass to a successor because of an operation of law.

B.  Extension of Consent to Arbitration to Non-Signatories

9.30  The widely used concept of ‘extension’ of the arbitration clause to non-signatories is a misleading concept since, in most cases, national courts and arbitral tribunals still base their determination of the issue on the existence of a common intent of the parties and, therefore, on consent.88 Indeed, in the majority of cases, the status of a non-signatory party does not result from the text of the agreement containing the arbitration clause, but from tacit acceptance, as is particularly the case for the extension to companies belonging to the same group.89 However, while the ‘group of companies’ doctrine discussed in this section does not encounter any major difficulties under French law, which has no formal requirements,90 this is not the case under other national laws which do not content themselves with either tacit acceptance or acceptance by conduct, but require that the will to submit to arbitration result from written documents.91

(p. 152) 9.31  Although most authors have recognized that such an extension should not take place unless it corresponds to the mutual intention of the parties, they are more or less favourable to presume such intention; they will accept ‘extension’ to a greater or lesser extent depending on:

  • •  whether they attach more or less weight to economic criteria and the efficiency of arbitration;

  • •  whether they consider arbitration the usual mode of dispute resolution in international commerce;

  • •  whether they give weight to the respect of contractual texts or on the principle of good faith in business matters; and finally

  • •  whether or not they permit international commercial usage to prevail over national laws.92

9.32  Section B will then consider the doctrine of arbitral estoppel which is often relied upon by US courts to compel arbitration between a signatory and a non-signatory party. Moreover, arbitration agreements may also be extended to non-signatories for other reasons unrelated to consent, in particular by lifting the corporate veil when there is an element of fraud in using a company or for reasons related to the interest of the administration of justice. Finally, the extension of arbitration agreements in cases of multiple contracts and successive contracts is examined.

1.  The ‘group of companies’ doctrine

9.33  The ‘group of companies’ doctrine is probably the most prominent and controversial of the theories developed to ‘extend’ an arbitration clause to non-signatory parties.93 Unlike other bases for binding non-signatory parties to an arbitration agreement—such as agency, alter ego, estoppel, etc—which have their origin in contract law or company law, the group of companies doctrine was developed specifically in the arbitration context.94

9.34  In international arbitration, groups of companies raise a number of different issues; some of them concern mainly the substance of the dispute, others seem to be of a more procedural nature.95 The existence of a group of companies gives a special dimension to the issue of consent, because consent to arbitration is expressed by conduct.96 Whether an arbitration agreement signed by a company member of a group of companies is also binding upon and entitles other members of that group, but non-signatories of the agreement, remains an open question in national court’s case law and in international arbitration practice.97 In the doctrine, the answer to this issue is as controversial as in the practice of arbitral tribunals and national courts.98

1.1  A brief characterization of the doctrine

9.35  The theory of ‘group of companies’, more an economic concept than a legal one,99 has developed in arbitration case law and, under the influence of the latter, before the French courts.100 Although arbitral awards have been making tentative references to ‘group of companies’ and (p. 153) how these groups may influence the jurisdiction of arbitral tribunals since the 1970s,101 the considerations of the arbitral tribunal in Dow Chemical v Isover102 are generally viewed as forming its cornerstone.103 While it is often said that the ‘group of companies’ doctrine has particularly flourished in ICC arbitrations, it was not as widely followed by arbitration case law as its notoriety might lead us to believe.104

9.36  Under the doctrine, a group of companies constitutes one and the same economic reality—despite the legal independence of the individual entities from one another—where the circumstances of the contract’s conclusion, its performance, its (possible) subsequent termination, and the degree of control executed among the group companies warrants such an inference.105 On the other hand, in all ‘group of companies’ decisions, the finding of an expression of consent to arbitration by conduct—consent implied by conduct106—generally remains key in binding non-signatories to an arbitration clause. The theory of ‘group of companies’ is distinct from agency because its aim is binding other members of the group to the arbitration agreement, and not replacing some members with others.107

1.2  Countries’ different approaches

9.37  The group of companies doctrine has not found the same acceptance in all countries. While French courts and arbitral tribunals seated in France have usually followed this doctrine, English courts, in particular, have rejected it as not forming part of English law. When the group of companies doctrine finds acceptance, the group structure and/or the active involvement of the non-signatories in the negotiation and execution of the particular contract must be such as to suggest that the non-signatory party intended to arbitrate.108 Consent—in the form of expression of consent to arbitration by conduct—therefore plays a key role in the group of companies’ theory, and national courts and arbitral tribunals have almost invariably referred to the requirement of common intention of the parties to arbitrate.109


9.38  In France,110 it was the ICC award No 4131, Dow Chemical v Isover111 which began the case law based on the ‘group of companies’ doctrine. Two of the four claimants were not mentioned as parties in the disputed contracts, but had participated in the negotiations and the performance of the contracts; they therefore claimed to benefit from the arbitration clauses contained therein.112 The arbitrators, by invoking Article 8(3) and (4) of the ICC Rules then in force, first confirmed the autonomy of the arbitration agreement with regard to all national laws, which is in accordance with the French conception of the separability of the arbitration agreement.113 The arbitral tribunal inferred therefrom that they should decide ‘based on the (p. 154) mutual will of the parties’ and ‘usage conforming to the needs of international commerce, notably where a group of companies is concerned’.114 The arbitrators determined the test to be applied as follows:

Considering, in particular, that the arbitration clauses expressly accepted by certain of the companies of the group should bind the other companies which, by virtue of their role in the conclusion, performance or termination of the contracts containing said clauses, and in accordance with the mutual intention of all parties to the proceedings, appear to have been veritable parties to these contracts or to have been principally concerned by them and the disputes to which they may give rise.115

9.39  Later in the Korsnas Marma v Durand-Auzias116 case the Paris Court of Appeal justified the extension to a non-signatory party on the basis of the reasoning that:

An arbitration clause contained in an international contract has an autonomous validity and effectiveness which requires for the clause to be extended to parties directly involved in the performance of the contract and in the disputes arising out of the contract, provided that it is established that their situation and their activities raise the presumption that they were aware of the existence and the scope of the arbitration clause, irrespective of the fact that they did not sign the contract including the arbitration agreement.117

9.40  Since then, the argument of the ‘autonomous validity and effectiveness of arbitration agreements’ has been reiterated by the Paris Court of Appeal in a number of cases;118 recently it was also approved by the Cour de Cassation in the ABS v Amkor119 case.120 The formula is based on two presumptions: the presumption of awareness of the clause, which is allegedly sufficient to presume acceptance thereof.121

9.41  Gradually national courts and arbitral tribunals departed from the context of group of companies and considered performance to operate as a self-standing basis to imply consent, independently of the existence of such a group.122

9.42  The final step was taken in a judgment of 28 November 1989 where the Paris Court of Appeal considered the carrier Cotunav bound by the arbitration clause contained in an agreement made between two public agencies, in which Cotunav had no part, for the sole reason that ‘by accepting to intervene in the performance of the contract as carrier appointed by one of the parties in the framework of the contract, Cotunav necessarily assumed the obligations defined by the contract with regard to the carrier and accepted its modalities, including (p. 155) the arbitration agreement’.123 Therefore participation in the performance of the agreement, deprived of any other link with the parties, led to an apparently irrefutable presumption124 of acceptance of the arbitration clause.125

9.43  The Cotunav case led to an enlargement of the previous case law, since it recognized such tacit acceptance outside of a group of companies. Tacit acceptance results solely from the performance of a contract concluded by other parties.126 Indeed, a subjective criterion, ie membership of a group, has been abandoned in favour of an objective criterion, ie a connection with the object of the contract, of which arbitration is merely a ‘component of its performance’.127 In other words, the involvement of the non-signatory in performance to the extent that it is evidence of implied consent to arbitrate may serve per se as the basis for extension, whether or not the facts relate to a group of companies.128

9.44  Due to the fact that the Paris Court of Appeal then repeated this reasoning in a number of subsequent judgments129 and was approved by the Cour de Cassation,130 the presumption of awareness and, by virtue thereof, of acceptance resulting from the performance of the contract, can now be considered a material rule applicable before French courts to international arbitration agreements.131


9.45  Switzerland has produced comparably few arbitral awards and court decisions explicitly dealing with the ‘group of companies’ doctrine. The Swiss Federal Tribunal in the Butec case132 underlined that caution should be exercised before deciding that a company was bound by an arbitration agreement concluded by another company belonging to the same group of companies.133 The court held that such a conclusion should only be drawn where factual circumstances are given which justify the assumption of an ‘appearance-based liability’ (Rechtsscheinhaftung).134 This judgment illustrates the gap existing between Swiss and French case law.135

9.46  Under these conditions it is understandable that arbitrators sitting in Switzerland have largely refused to extend arbitration agreements, not just for formal reasons, but by considering that the notion of ‘group of companies’ and the piercing of the corporate veil are instruments which should only be used with extreme reluctance.136 In summary, the present state of Swiss law is that the extension of an arbitration agreement to a party which does not appear therein can be envisaged only if it can be established (by any means) that such a party was validly represented by one of the other parties—which does not result solely from membership in a group of (p. 156) companies—or if there was subsequent ratification or, finally, if the attempt to evade arbitration constitutes an abuse of rights allowing a piercing of the corporate veil (Durchgriff).137


9.47  English courts strongly respect the contractual nature of arbitration. Indeed, the doctrine of ‘group of companies’ is said to be inconsistent with the principle of privity of contract, the principle of the corporate veil and the treatment of derivative actions.138 In Peterson Farms, the Commercial Court held that ‘the [group of companies] doctrine . . . forms no part of English law’.139 Therefore, the High Court confirmed the restrictive approach of English case law140 with regard to a presumption of the extension of an arbitration agreement to the other members of the group.141 It has been argued that Peterson Farms142 represents a set-back to the efforts of incorporating the ‘group of companies’ doctrine into transnational law or the lex mercatoria.143 On the other hand, it has also been observed that the decision of the Commercial Court does not inevitably command the conclusion of the end of any possibility of extension of the arbitration clause to a non-signatory company when the underlying contract is governed by English law.144 Indeed, while the existence of a group of companies is not the ground on which courts and arbitral tribunals usually extend arbitration clauses to non-signatories, they generally base their decision on consent or on conduct as an expression of implied consent or as a substitute for consent.145 Extension may therefore be achieved by recourse to such theories as agency, trust, or piercing the corporate veil.

United States

9.48  The same theories are also applied in the United States. However, it appears that in relation to the issue of extension of the clause to non-signatories, US law is much more liberal146 than any in Europe. At least in some Circuits, the paramount concern of the courts is the ‘federal policy favouring arbitration’.147 On the other hand, the Sarhank case,148 where the Second Court of Appeals declined to enforce an arbitral award against a corporate parent where there was no ‘clear and unmistakable intent by [it] . . . to arbitrate’, may indicate a shift from a rather liberal view, as expressed, for example, in the JJ Ryan case,149 back to a greater emphasis on the parties’ intent to arbitrate.150

1.3  The theoretical foundation of the doctrine and its rejection

9.49  Some authors suggest that the principles on which the ‘group of companies’ doctrine is founded are based on the lex mercatoria or on usages of international trade; others, conversely, submit that the law governing the arbitration agreement should be applied.151 While the advocates of the ‘group of companies’ doctrine purport that the exceptions to the notion of the separate entity of each juristic person and the privity of contract can be derived from the so-called (p. 157) lex mercatoria, the opponents of the ‘group of companies’ doctrine also recognize the existence of exceptions, however without deriving these exceptions from the lex mercatoria, but rather from the respective rules of the national proper laws of contract.152

9.50  Not surprisingly the majority of the authors who favour ‘extension’ to non-signatories within a group of companies are French,153 as they do not have to take any formal154 or substantive conditions into account, with the exception of such substantive rules that might result from international public policy.155 On the other hand, German and English authors are rather critical towards the ‘group of companies’ doctrine and reject it, only admitting very restrictively to piercing of the corporate veil (Durchgriff).156

1.4  The party’s conduct in relation to consent

9.51  In the majority of cases, the status as party of a non-signatory does not result from the text of the agreement containing the arbitration clause, but from tacit acceptance.157 This is particularly so for the ‘group of companies’ doctrine which is based on tacit or even presumed acceptance of the arbitration clause.158 Such acceptance would result either from conduct at the time of the conclusion of the agreement, in particular participation in its negotiation but without the intention of signing it,159 or from subsequent acts, particularly supervision of the operations or an active role in their performance, from which tacit acceptance may be inferred.160 However, while originally participation in the negotiation or performance of the contract was only an indication of such acceptance, a presumption—at least according to French law—has since been established, by virtue of an alleged usage of international commerce, that knowledge of the arbitration clause constitutes acceptance thereof.161

9.52  Some cases even suggest that a party’s conduct should not necessarily be regarded as an expression of a party’s implied consent, but rather the party’s substantial involvement in the negotiation and performance of the contract and the knowledge of the existence of the arbitration clause have a standing of their own, as a substitute for consent, just as reliance is a substitute for consideration.162 In any case, it has been observed that, whatever the factual scheme, the issue of extension of the arbitration clause to the other companies of the group should be analyzed in terms of consent, rather than by determining whether the so-called ‘group of companies’ doctrine is known or unknown in the relevant legal system.163

2.  The doctrine of arbitral estoppel

9.53  The doctrine of equitable estoppel in its traditional sense reflects the general legal principle of non venire contra factum proprium, found in Roman law and recognized in many contemporary civil law jurisdictions.164 In arbitration the doctrine has developed a specific meaning applicable (p. 158) to non-signatories in the context of jurisdictionally fragmented multiparty situations.165 The theory of estoppel is often relied upon by US courts to compel arbitration between a signatory and a non-signatory party (arbitral estoppel).166

2.1  The doctrine of arbitral estoppel with respect to arbitration agreements

9.54  In general, the doctrine of arbitral estoppel applies where a party, by its own conduct, is prevented from denying that the other party in question is entitled to rely on an arbitration agreement.167 Or, in other words, estoppel denies a party who has accepted the benefits of a contract containing an arbitration clause the defence that such an arbitration clause is not applicable to that party.168 While in the majority of cases the doctrine has been employed by the US courts to estop the signatory party ‘from avoiding arbitration with a non-signatory’, on various occasions the doctrine has equally been applied to estop the non-signatory party from avoiding arbitration with the signatory party.169

9.55  US courts have recognized at least two different versions of arbitral estoppel:170

  1. 1.  In the equitable version of arbitral estoppel,171 courts have compelled a non-signatory to arbitrate where the non-signatory knowingly exploits or directly receives a ‘benefit’ from the agreement containing the arbitration clause.172 In such instances, courts have allowed estoppel to be used as a proverbial ‘sword’ rather than ‘shield’, ie empowering the signatory to request arbitration of a claim.173

  2. 2.  In the intertwined version of arbitral estoppel,174 courts have compelled arbitration based on an analysis of:175

    • •  the relationship between the claim and the contract containing the arbitration clause; and

    • •  the existence of a ‘nexus between the parties’.176

In this second version two conditions must apply concurrently:

  • •  first, the dispute between the signatory and the non-signatory must be intertwined with the contract containing an arbitration clause; and

  • •  secondly, the non-signatory must have contractual or close corporate links with one of the signatories.177

(p. 159) 2.2  The doctrine in relation to consent to arbitration

9.56  In the case of the equitable version of the doctrine of arbitral estoppel, the US courts will normally take into account both equitable and consensual considerations to decide whether to refer the dispute between a signatory and non-signatory to arbitration.178 On the other hand, the broad language of the intertwined version of arbitral estoppel has been fertile ground for arguments that in effect use only the close relationship of the signatory and the non-signatory as the basis for implied consent to arbitration.179

9.57  The concern with both versions of the arbitral estoppel doctrine is that they often result in highly fact-specific decisions and sometimes appear to be used as an ‘easy option’ rather than applying a more rigorous legal analysis using traditional principles of contract and agency law.180 This was the case in Choctaw Generation v American Home Assurance,181 where the intertwined version of arbitral estoppel was applied.

9.58  In relation to bank guarantees182 or letters of credit issued on the basis of a contract containing an arbitration clause it cannot be assumed that the bank has consented to arbitration on the basis of the underlying contract if the guarantee or the letter of credit does not provide for arbitration.183 In Choctaw the US Court of Appeal for the Second Circuit held that a signatory to an arbitration clause may be bound under the doctrine of estoppel to arbitrate claims against the bank, where the issues the non-signatory (the bank) is seeking to resolve in arbitration ‘are intertwined with the agreement the estopped party has signed’.184

9.59  Yet the differentiation made in Choctaw seems to have its reason less in the existence of a ‘nexus between the parties’ as the ‘nexus between the parties’ is the same under both circumstances. However, while in the case of bank guarantees or letters of credit issued on the basis of a contract containing an arbitration clause the bank (in the position of a respondent) has with the bank guarantee or the letter of credit not expressed its consent to arbitrate, in the Choctaw case the bank (in the position of a claimant) gave its consent to arbitrate by beginning the arbitration proceedings (claiming). On the other hand, it must also be observed that in the Choctaw case the respondent had only consented to arbitrate with the other signatory party to the arbitration agreement, but not with the bank. Therefore, the differentiation made in treating the two situations can only be justified when in the Choctaw case one enlarges the consent of the respondent from a consent to arbitration with a specific party to a consent to arbitration without having regard with whom the arbitration shall take place (as far as there is a relationship between the claim and the contract containing the arbitration clause).

9.60  In the case of intertwined estoppel the importance of consent has been practically diminished, and even on some occasions overlooked.185 Indeed, in some cases ‘the non-signatory’ parties are actually third parties strictu sensu.186

(p. 160) 3.  Extension on grounds unrelated to consent

9.61  Arbitration agreements may also be extended to non-signatories for reasons unrelated to consent. In contrast to the situation where the arbitration agreement is extended as it were by expanding consent, in these cases a party is regarded as bound by the arbitration agreement despite having clearly expressed an intention to the contrary or without any reference to consent.187

3.1  Alter ego and lifting the corporate veil

9.62  Very often the group of companies doctrine touches upon the similar, albeit distinguishable, theory of lifting the corporate veil, which was developed in company law, mainly in common law countries.188

9.63  The principle of lifting the corporate veil is applicable in a whole series of different factual situations which have one characteristic feature in common: that a company is used by another company, by a natural person, or by a State as a trustee for certain purposes.189 If either the trustor or the trustee have then signed an arbitration agreement, the effects of this agreement may be extended to the respective partner in the trust relationship.190 The theory of lifting the corporate veil focuses therefore primarily on an excessive element of domination and fraud, rather than consent, which is the focus of the discussion under the ‘group of companies’ doctrine.191

9.64  Given the very extensive case law in connection with groups of companies, and the assumption of tacit or even presumed acceptance, the French courts have rarely had to rely on the notion of fraud in order to pierce the corporate veil.192 The situation is, however, different in other countries—for instance Switzerland,193 even though in European jurisdictions the test for lifting the corporate veil is usually quite restrictive.194 On the other hand, in the United States the threshold for lifting the corporate veil has traditionally been, as a result of the paramount policy in favour of arbitration, much less strict than that adopted in European jurisdictions.195 A ‘close relationship’ between the entities involved seems to be sufficient to extend to the parent company the arbitration clause concluded by its subsidiary.196 Recent US cases, (p. 161) however, show an evolution towards a more conservative approach, requiring some abuse of the corporate form.197

3.2  Extension in the interest of the administration of justice

9.65  The ground of ‘extension in the interest of the administration of justice’ may sound somewhat vague. However, according to Vidal it is fully justified in view of the jurisdictional nature of arbitration and the legitimate expectations of the parties.198 An example is the reference to the indivisibility of the dispute in the decision of a US court,199 which held that when the claims made against a parent company and its subsidiary are based on the same facts and are fundamentally indivisible, a tribunal may decide that the claims made against the parent company should be decided by arbitration even though that company was not formally a party to the arbitration clause.200 Moreover, there is also insistence in some cases on the need for the arbitrators to be presented with all the legal and economic aspects of the dispute.201 Finally, considerations about the effect of arbitral awards on third parties might also be important.202

4.  Multiple contracts and successive contracts

9.66  Disputes with regard to the scope of arbitration clauses may arise where the parties have entered into a number of different agreements, either simultaneously or consecutively, each with (or sometimes without) a separate dispute resolution mechanism.203 According to the theory of ‘groups of contracts’ ‘if the undertakings of the parties are indivisible, ie 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’.204

9.67  While the ‘group of companies’ doctrine deals with a situation of multiple companies and a single contract, groups of contracts situations presume the existence of a multitude of related contracts between multiple parties, or between the same parties.205 Nevertheless the issue with regard to consent to arbitration is similar: whether an arbitration clause present in one contract can be extended to related contracts, notwithstanding their formal independence.206 The issue of multiple contracts is also addressed by the newly revised ICC Rules (2012) which contain a provision that expressly deals with this aspect.207

4.1  Multiple contracts

9.68  The same parties may enter into a series of contracts related to a single project or enterprise, only some of which contain dispute resolution provisions.208 The question which then arises (p. 162) is whether in these cases an arbitration clause in one agreement may extend to disputes under other agreements.209 Indeed, an arbitration agreement may also exist if the contract is part of a series of contracts between the same parties, only some of which contain arbitration clauses.210

9.69  The question if the contracts are interrelated has primarily to be decided by consensual analysis,211 even though the decisions consider fact-related aspects. When the parties to the relevant contracts are the same, and the contracts all relate to a single project, or economic enterprise, courts of various countries212 have generally been willing to hold that an arbitration clause in one agreement extends to related agreements, provided that the other agreements do not contain inconsistent arbitration or forum selection clauses.213 Arbitral tribunals have generally reached similar outcomes,214 including in cases where multiple contracts contain identically worded arbitration clauses.215

9.70  The situation is more complex when the identities of the parties to related contracts differ, as it is often the case in construction projects, joint ventures, insurance settings, etc. In general no consent to arbitration can be assumed if third parties are involved, except where all parties can be bound through non-signatory principles to an arbitration agreement.216 Hence an arbitration clause contained in a construction contract with the general contractor does not usually cover the general contractor’s contract with the subcontractor.217 Moreover, in relation to bank (p. 163) guarantees or letters of credit issued on the basis of a contract containing an arbitration clause, it cannot be inferred that the bank has consented to arbitration on the basis of the underlying contract if the guarantee or the letter of credit does not provide for arbitration.218

9.71  The newly revised ICC Rules (2012) address the question of multiple contracts. Article 9 provides that:

Subject to the provisions of Articles 6(3)–6(7) and 23(4), claims arising out of or in connection with more than one contract may be made in a single arbitration, irrespective of whether such claims are made under one or more than one arbitration agreement under the Rules.

Therefore, Article 9 of the ICC Rules (2012) permits, in the case of multiple contracts, claims that are made under more than one arbitration agreement concluded under the ICC Rules to be determined in a single arbitration. However, when this is the case ‘the arbitration shall proceed as to those claims with respect to which the Court219 is prima facie satisfied:

  1. (a)  that the arbitration agreements under which those claims are made may be compatible, and

  2. (b)  that all parties to the arbitration may have agreed that those claims can be determined together in a single arbitration.’220

In other words, with the second requirement (Article 6(4)(ii)(b)), the ICC Rules (2012) follow a strict consensual approach, ie indirect consent—the simple choice of the ICC Rules—is not sufficient to deal with claims of different arbitration agreements. No discretionary power is thus left to the arbitral tribunal or to the institution, but the parties have to agree.

4.2  Successive contracts

9.72  In the case of successive contracts between the same or similar parties, where one, but not all, of the successive contracts contains an arbitration clause, questions can arise as to whether such a clause extends to disputes under subsequent (or earlier) contracts.221 To determine the scope of the arbitration clause courts have looked to the language and relationship of the parties’ agreements in order to determine their intent, while generally presuming that the parties desired a single, sensible, and efficient dispute resolution mechanism.222

9.73  The arbitration clause in the main contract may also extend to follow up or repeat contracts entered in close connection and in support of a main contract.223 French courts, particularly, have held that an arbitration clause in the earlier of two or more related agreements may extend to disputes under later contracts, notwithstanding the absence of any dispute resolution provision in such contracts.224 However, between the agreements there must be a sufficiently (p. 164) close connection.225 The same approach has also been followed by national courts of various other countries226 and arbitral tribunals.227


1  On consent to arbitration related to procedural mechanisms see Chapter 10.

3  On consent by conduct see para 5.30.

4  See Rau and Pédamon, p 452. On this aspect see para 5.11.

5  Youssef, pp 74 et seq.

8  ibid.

10  See also Youssef, p 80.

12  Article 1989 of the French and Belgian Civil Codes; Art 1008 of the Austrian Civil Code; Art 396(3) of the Swiss Code of Obligations.

13  Article 217(2) of the Greek Civil Code; Art 1392 of the Italian Civil Code.

14  BGB, s 167(2); English law. See Poudret and Besson, para 274.

16  See ICC Case No 5730 of 1988, 117 Clunet 1029 (1990) 1036; Reiner, Agent’s Power, pp 88 et seq. See also Lew, Mistelis, Kröll, para 7–31.

17  Hosking, p 293. See, eg Interbras Cayman Co v Orient Victory Shipping Co, SA, 663 F 2d 1, 6–7 (2d Cir 1981).

20  See Zuberbühler, p 21, footnote 12. See, eg G SpA v Mr Z, unpublished interim award of 4 August 1994, confirmed by DFT of 16 May 1995, ASA Bulletin 4/1996, 667; Habegger, Groups of Companies, No 50.

22  Lerner v Amalgamated Clothing & Textile Workers Union, 938 F 2d 2, 5 (2d Cir 1991).

23  See, eg Pritzker v Merrill Lynch, Pierce, Fenner and Smith, 7 F 3d 1110 (3d Cir 1993); Roby v Corporation of Lloyd’s, 996 F 2d 1353, 1360 (2d Cir 1993). However, this general proposition has been rejected in other circuits. See, eg Westmoreland v Sadoux, 299 F 3d 462, 467 (5th Cir 2002); McCarthy v Azure, 22 F 3d 351, 357–61 (1st Cir 1994).

25  See, eg Usina Costa Pinto SA Azucar e Alcool v Louis Dreyfus Sugar Co, Inc, 933 F Supp 1170, 1179 (SDNY 1996).

26  See, eg AHTNA Gov’t Servs Corp v 52 Rausch, LLC, No C 03–00130 SI, 2003 US Dist LEXIS 2460, at *11 (ND Cal Feb 19, 2003). See Hosking, p 293.

28  For an overview see ibid.

29  On assignment and arbitration, see in particular Landrove, Assignment.

32  Cour de Cassation, 5 January 1999, Banque Worms v Bellot, Rev Arb 85 (2000) 86; Cour de Cassation, 8 February 2000, Société Taurus Films v Les Film du Jeudi, Rev Arb 280 (2000); Cour d’Appel of Paris, 25 November 1999, SA Burkinabe des ciments et matériaux v Société des ciments d’Abidjan, Rev Arb 165 (2001) 168.

33  See, eg Schiffahrtsgesellschaft Detlev Von Appen GmbH v Voest Alpine Intertrading [1997] 2 Lloyd’s Rep 279; this follows also from English Arbitration Act, s 82(2); Through Transport Mutual Insurance Association (Eurasia) Ltd v New India Assurance Co Ltd [2005] EWHC 455 (Comm); West Tankers Inc v RAS Riunione Adriatica Sicurta Spa [2007] EWHC 2184 (Comm); CMA CGM SA v Hyundai MIPO Dockyard Co Ltd [2008] EWHC 2791 (Comm). On this last case see Brekoulakis, Third Parties, paras 2.13 et seq.

34  Supreme Court of Sweden, 15 October 1997, case no Ö 3174/95, MS Emja Braack Schiffahrts KG v Wärtsila Diesel Aktiebolag (1998), Rev Arb 431, with note Jarvin.

35  DFT, 9 May 2001, (2002) 20 ASA Bull 80; DFT, 7 August 2001, (2002) 20 ASA Bull 88; DFT, 16 October 2001, (2002) 20 ASA Bull 97. See also Scherer, Assignments, pp 109–120.

36  12 November 1990—Bundesgerichtshof (Federal Supreme Court), in (1992) 17 YBCA 510–512.

38  CA Paris, 25 November 1999, SA Burkinabe des ciments et matériaux v Société des ciments d’Abidjan, Rev Arb 165 (2001) 168.

39  The Foreign Trade Arbitration Commission at the USSR Chamber of Commerce and Industry, award in Case No 109/1980, 9 July 1984, All-Union Foreign Trade Association ‘Sojuznefteexport’ (USSR) v Joc Oil Ltd (Bermuda), XVIII YBCA 92 (1993) para 17. For further US cases, see Girsberger and Hausmaninger referring to Kaufman v William Iselin & Co, Inc, 143 NE 780 and Lachmar v Trunkline LNG Co, 753 F 2d 8 (CA 2d Cir, 1985).

41  See the leading case decided in 1998 by the Italian Corte di Cassazione (N 12616, Foro italiano 1999, I/2, p 2979, c 4). However, the Italian arbitral practice recognizes that a transfer of the contract, and not just that of a claim resulting from it, entails the transfer of the arbitration clause (Riv dell’arb 2000, pp 167–168).

47  On separability see paras 5.88 et seq.

49  Pierre Mayer, Note–Cour d’Appel of Paris, 28 November 1989; Cour d’Appel of Paris, 8 March 1990, Rev Arb, pp 675, 686.

51  Notably Paris, Rev Arb 1966, p 100; Rev Arb 1988, p 565 (transfer of the contract) and 570 (assignment of a claim); Rev Arb 1993, p 624 (assignment of a claim). Lyon, Rev Arb 1997, p 402 (assignment of an undertaking to sell shares); Cas, Rev Arb 2000, p 85, with a note by Cohen = Clunet 1999, p 787, with a note by Poillot Peruzzetto (assignment of claims), and Rev Arb 2000, p 280, with a note by Gautier: application to a substituted agent; Paris, Rev Arb 2001, p 165, with a note by Cohen: assignment of a claim. On the distinction between the assignment of a claim and the transfer of a contract, see ICC Award No 7154, Collection III, p 555, with a note by Derains, No IV.

53  Girsberger and Hausmaninger, p 141, referring to Lachmar v Trunkline LNG Co, 753 F 2d 8 (CA 2d Cir, 1985).

56  Clunet 2002, p 1084 (ICC award 7983), with a note by S Jarvin: the contract containing a clause of confidentiality would be deemed concluded intuitu personae and so not transferable without the consent of the parties.

58  Paris, Rev Arb 2001, p 165, with a note by Cohen.

59  See Law, Mistelis, and Kröll, para 7–55.

60  Shayler v Woolf [1946] Ch 320, 324; Swedish Supreme Court, 15 October 1997, MS Emja Braack Schiffahrts KG v Wärtsila Diesel Aktiebolag, XXIV YBCA 317 (1999). For a different view, see, however, the early English decision Cottage Club Estates v Woodside Estates Co (1928) 2 KB 463, 466; 97 LJKB 72, 74.

61  See, eg France, CA Paris, 28 January 1998, CCC v Filmkunst, Rev Arb 567 (1988); Germany, BGH, 2 March 1978, NJW 1585 (1978) 1586.

63  (1924) 143 NE 779, 780; 238 NY 2d 22.

66  Clunet 2002, p 1084 (partial award, ICC No. 7983), with a note by S Jarvin.

69  ICC Award No 1704 = Collection I, p 312. On the French conflict of law rules applicable to statutory transfers, see de Boisseson, Arbitrage, para 625 and Fouchard, Gaillard, and Goldman, paras 701–703.

71  See, eg CJ GE, SJ 1987, p 650 = ASA Bulletin 1987, p 269, consid 5.

72  See, eg QB and CA, Schiffahrtsgesellschaft Detlev von Appen v Voest Alpine Intertrading and Others [1997] 1 Lloyd’s Rep 179 and 2 Lloyd’s Rep 279: the subrogated insurer is subject to the arbitration clause, and restrained by an anti-suit injunction; Mustill and Boyd, Arbitration, p 137, speak of ‘novation’, but as Goutal observes (Rev Arb 1988, p 447), novation gives rise to a new right so that no transfer takes place.

75  Swiss Federal Tribunal, ASA Bulletin 1998, p 653 = RSDIE 1999, p 593, with an approving note by Knoepfler; for Sweden, see SAR 2004/1, p 98, with notes by Zikin and Landrov, and Hobér, Party substitution, p 46, Collection III, p 543: ICC Award No 3281 applying this case law (Poudret and Besson, para 290).

77  ibid.

79  See also Collins v Int’l Dairy Queen Inc and American Dairy Queen Corp, 2 F Supp 2d 1465 (MD Ga 1998).

80  In fact this requirement has been very loosely applied. See, eg Spear Leeds & Kellogg v Central Life Assurance Co, 85 F 3d 21 (2d Cir 1996).

81  In November 2003, the Commercial Court issued a judgment addressing, apparently for the first time, this provision and the impact of the Contracts (Rights of Third Parties) Act 1999 on arbitration clauses, Nisshin Shipping Co Ltd v Cleaves & Co [2003] EWHC 2602 (Comm), summarized by Nappert and Pires Ferreira, para 17.

82  Halisbury’s Statutes, p 318, and Mustill and Boyd, Arbitration, p 147 (Poudret and Besson, para 289).

83  Hansard, House of Lords, col 1059 (27 May 1999) (per Lord Wilberforce).

84  UK Contracts (Rights of Third Parties) Act 1999, Explanatory Note, § 34 (Hosking, p 292).

85  Cas, Bisutti, Rev Arb 1987, p 139, with a note by Goutal, and 1988, p 559; de Boisséson, Arbitrage, p 109 para l32 et seq, does not exclude it; Li, p 61 para 81, is rightly critical.

86  Rev Arb 1987, pp 145–146.

90  See Art 1507 of the French CCP.

91  Poudret and Besson, paras 251 et seq. On expression of consent to arbitration by conduct see para 5.30.

92  Poudret and Besson, para 253, which gives an overview of the views expressed by different authors.

93  Brekoulakis, Third Parties, para 5.01. See also Dallah v Pakistan [2008] EWHC 1901 (Comm); [2009] 1 All ER (Comm), 505; [2009] EWCA Civ 755; [2010] 2 WLR 805; [2010] UKSC 46. On the Dallah case see also ibid, paras 6.69 et seq.

96  See ibid, para 14–6. On the expression of consent to arbitration by conduct see para 5.30.

98  ibid.

101  See, eg ICC Case No 2138 of 1974, in Derains and Jarvin (eds), p 934; ICC Case No 1434 of 1975, ibid 263; ICC Case No 2375 of 1975, ibid 257 and (1985) Rev Arb 583, cited by Brekoulakis, Third Parties, para 5.04, footnote 4.

102  Dow Chemical v Isover Saint Gobain, ICC Case No 4131 (1982), ICC Awards 1974–1985, 146–153 and 464–473 with observations by Y Derains. On the Dow Chemical case see Brekoulakis, Third Parties, paras 5.04 et seq.

104  See Poudret and Besson, para 254, who observed in 2007 that among some 30 published awards concerning this question, only a quarter recognized the extension of the clause to companies.

106  On expression of consent to arbitration by conduct see para 5.30.

109  ibid.

110  For an overview of the French approach see Dallah v Pakistan [2010] UKSC 46, on appeal from [2009] EWCA Civ 755, paras 110 et seq, more in particular paras 118 et seq.

111  ICC Award No 4131 (Dow Chemical), Clunet 1983, p 899 = Rev Arb 1984, p 137.

113  ibid. On the French conception of the separability of the arbitration agreement see paras 5.97 et seq.

114  ibid.

116  Korsnas Marma v Durand-Auzias, Rev Arb 1989, p 691, criticized by Tschanz p 707, by Fouchard, Gaillard, and Goldman, paras 440 and 505, and Poudret, Extension, pp 900–901; Jarrosson, Agreement, pp 216–217, contents himself with recalling the criticism levelled against the judgment.

118  See Cour d’Appel, Paris, 14 February 1989; Ofer Bros v Tokyo Marine and Fire Insurance (1989) Rev Arb 691, with note P-Y Tschanz; Cour d’Appel, Paris, 11 January 1990; Orri v Lubrifiants Elf Aquitaine (1992) Rev Arb 95, with note D Cohen; (1991) 118 Clunet 141, with note B Audit. Cour d’Appel, Paris, 7 December 1994, V2000 v Project XJ 220 ITD et autre (1996) Rev Arb 67, with note C Jarrosson (but not in the context of the group of companies doctrine); Paris Cour d’Appel, 22 March 1995, SMABTP et autre v Stationor et autre (1997) Rev Arb 550. Also more recently, Paris Cour d’Appel, 7 May 2009, in Petites Affiches 2009, nos 159–60, pp 1–022, with note B Jerome.

119  Cour de Cassation, 27 March 2007, Alcatel Business Systems, Alcatel Micro Electronics and AGF v Amkor Technology et al, Cass le civ, [2007] 11 JCP I 168, with note C Seraglini.

123  Poudret and Besson, para 256, making reference to Rev Arb 1990, p 675 (1 case), with a critical note by P Mayer. The judgement of the Paris Court of Appeal was later confirmed by the Cour de Cassation, Cass (1st Civ Ch), 11 June 1991, Rev Arb 1991, p 453, with note by P Mayer.

124  The judgment speaks of ‘necessarily’.

127  ibid.

129  Notably Orri, Rev Arb 1992. p 95, and V2000, Rev Arb 1996, p 245.

130  See Cour de Cassation, 27 March 2007, Alcatel Business Systems, Alcatel Micro Electronics and AGF v Amkor Technology et al, Cass le civ, [2007] 11 JCP I 168, with note C Seraglini.

132  DFT 4P.330+332/1994 of 29 January 1996; the decision of the Swiss Federal Tribunal has also been published in ASA Bulletin 3/1996, 496–507. The decision of the Swiss Federal Tribunal confirmed Saudi Butec Ltd et AI Fouzan Trading v Saudi Arabian Saipem Ltd, an unpublished ICC interim award of 25 October 1994.

133  Berger and Kellerhals, para 530, making reference to ibid, consid 7.

134  ibid. On the Butec case see also Zuberbühler.

136  See in particular the awards ICC Nos 4402, 4504, 5281, 5721 and ASA Bulletin 1990, p 270.

139  Peterson Farms Inc v C&M Farming Limited [2004] EWHC 121 (Comm), 62. For a discussion of the case, see, eg Gaffney, Group of Companies.

140  Adams v Cape Industries [1991] 1 All ER 929, CA.

142  Peterson Farms Inc v C&M Farming [2004] 1 Lloyd’s Rep 603, QB = SAR 2004/1, p 282.

146  See, eg Thompson CSF v American Arbitration Association, 64 F 3rd 773, 776 (2nd Cir 1995); Bel-Ray Co v Cbemrite (PTY) Ltd, 181 F 3rd 435 (3rd Cir 1999).

148  Sarhank Group v Oracle Corporation, 404 F 3d 657 (2nd Cir 2005). For case notes, see Wilske and Shore and Salomon and Sterken.

149  JJ. Ryan & Sons v Rhone Poulenc Textile SA, 863 F 2d 315 (4th Cir 1988); see Hosking, pp 294–295, citing further decisions of the 4th Circuit Court of Appeals.

152  See Sandrock, Extending, pp 167 et seq.

153  See, eg de Boisséson, Arbitrage, p 522 para 603 No l; Derains, Extension, p 242; Derains and Schaf, in particular p 233, recognizing a ‘presumed tacit acceptance’; and Jarrosson, Agreement.

154  See Art 1507 of the French CCP.

159  Derains, Extension, p 242.

160  Blessing, Introduction, para 498. See also de Boisséson, Arbitrage, pp 522 et seq; Derains, Extension, p 242.

163  ibid.

166  ibid.

168  See, eg Intergen NV v Grina, 344 F 3d 134, 145 (1st Cir 2003). See also, eg Sentner, 58–66 (with an overview of US case law); Hosking, pp 293–294. Certain estoppel applications have been the subject of intense academic debate. See, eg Uloth and Rial, Equitable Estoppel, pp 604–624 (tracing the development of what is referred to as ‘intertwined claims estoppel’).

170  Apart from these two variants of estoppel, courts have also applied a similar analysis to require a non-signatory to arbitrate based on so-called ‘assumption’ of the obligation. See, eg Gvozdenovic v United Air Lines, Inc, 933 F 2d 1100, 1105 (2d Cir 1991).

171  On the equitable version of arbitral estoppel, see Brekoulakis, Third Parties, paras 4.07 et seq with an overview of cases.

172  See, eg EI DuPont de Nemours & Co v Rhone Poulenc Fiber and Resin Intermediates, SAS, 269 F 3d 187, 200 (3d Cir 2001).

173  See, eg American Bureau of Shipping v Tencara Shipyard, SPA, 170 F 3d 349 (2d Cir 1999); Int’l Paper Co v Schwabedissen Maschinen and Anlagen GmBH, 206 F 3d 411 (4th Cir 2000).

174  On the intertwined version of arbitral estoppel, see Brekoulakis, Third Parties, paras 4.14 et seq with an overview of cases.

175  See, eg Sunkist Softdrinks, Inc. and Del Monte Corp v Sunkist Growers, Inc, 10 F 3d 753, 757 (11th Cir 1993).

179  See, eg Sam Reisfeld & Son Imp Co v SA Eteco, 530 F 2d 679 (5th Cir 1976); McBro Planning and Development Co v Triangle Electronic Construction Co, Inc, 741 F 2d 342 (11th Cir 1984).

181  Choctaw Generation Ltd Partnership v American Home Assurance Company, 17(1) Mealey’s IAR C-1 (2002) C-2 (2d Cir 2001); see also JA Jones, Inc et al v The Bank of Tokyo-Mitsubishi Ltd et al, XXV YBCA 902 (2000) 904 (EDNC 1999); for the application of the doctrine of equitable estoppel in other cases, see International Paper Company v Schwabedissen Maschinen & Anlagen GmbH, XXV YBCA 1146 (2000) 1149–1150.

182  On the issue of consent in relation to bank guarantees, see also Hanotiau, Bank Guarantees.

183  Grundstatt v Ritt, 106 F 3d 201 (7th Cir 1997).

186  ibid.

189  Sandrock, Extending, p 172. See the description of three different kinds of cases at pp 174 et seq.

190  See Sandrock, Extending, pp 172 et seq.

193  See, eg the Butec case, DFT 4P.330+332/1994 of 29 January 1996; the decision of the Swiss Federal Tribunal has also been published in ASA Bulletin 3/1996, 496–507. The decision of the Swiss Federal Tribunal confirmed Saudi Butec Ltd et AI Fouzan Trading v Saudi Arabian Saipem Ltd, an unpublished ICC interim awards of 25 October 1994. See also Habegger, Groups of Companies, para 51; Hanotiau, Complex Arbitrations, para 121, Zuberbühler, pp 28 et seq.

195  Youssef, pp 126 et seq.

196  ibid, making reference in footnote 3 to Sunkist Soft Drinks, Inc v Sunkist Growers Inc, 10 F 3d 753, 758 (11th Cir 1993). Smoothline Ltd v North American Foreign Trading Corp, 2002 WL 31885795 (SD NY 2002); Beiser v Weyler, 284 F 3d 665 (5th Cir 2002); EI DuPont de Nemours and Co v Rhone Poulenc Fiber and Resin Intermediates, SAS, 269 F 3d 187 (3d Cir 2001); Smith/Enron Cogeneration Ltd Partnership, Inc v Smith Cogeneration Intern, Inc, 198 F 3d 88 (2d Cir 1999); United Intern. Holdings, Inc v Wharf (Holdings) Ltd, 76 F 3d 393 (10th Cir 1996); Thomson CSF, SA v American Arbitration Ass’n, 64 F 3d 773 (2d Cir 1995).

197  Youssef, pp 126 et seq, making reference to Smoothline Ltd v North American Foreign Trading Corp, 2002 WL 31885795 (SD NY 2002), at p 11, and TNS Holdings, Inc v MKI Securities Corp, 92 NY 2d 335, 680 NYS 2d 891, 703 NE 2d 749, 751 (1998).

198  See Vidal, p 73.

199  Ryan, 863 F 2d 315 (4th Cir 1988) Court of Appeals.

201  Paris, 7 December 1994, Jaguar, Rev Arb 1996.245 (Annot Ch Jarrosson), upheld by Cass Civ Ire, 21 May 1997, Rev Arb 1997.537 (Annot E Gaillard).

202  On this aspect see Brekoulakis, Third Parties, paras 9.03 et seq.

205  Youssef, pp 131 et seq.

206  ibid.

207  See Art 9 of the ICC Rules (2012). On this provision with the heading ‘multiple contracts’ see Voser, pp 795 et seq.

209  ibid.

212  See the court decisions cited by Born, pp 1111 et seq, footnotes 228 et seq:

  • –  In the United States see, eg Int’l Ambassador Programs, Inc v Archexpo, 68 F 3d 337, 340 (9th Cir 1995); JA Jones, Inc v Bank of Tokyo-Mitsubishi, Ltd, 1999 US Dist LEXIS 5284 (EDNC 1999); Mississippi Phosphates Corp v Unitramp Ltd, 11(12) Mealey’s Int’l Arb Rep E-1 (SD Miss 1996); GD Searle & Co v Metric Constr, Inc, 572 F Supp 836 (ND Ga 1983). Cf Riley Mfg Co v Anchor Glass Container Corp, 157 F 3d 775, 781 (10th Cir 1998).

  • –  In France see, eg Judgment of 23 November 1999, Société Glencore Grain Rotterdam v Société Afric, 2000 Rev Arb 501 (Paris Cour d’Appel); Judgment of 14 May 1996, Société Sigma Corp v Société Tecni-Ciné-Phot, 1997 Rev Arb 535 (French Cour de Cassation civ 1e); Judgment of 5 March 1991, Pepratx v Fichou, 1992 Rev Arb 66 (French Cour de Cassation com); Judgment of 29 March 1990, 1992 Rev Arb 66 (Bobigny Tribunal de commerce).

  • –  In England see, eg Al-Naimi v Islamic Press Agency Inc [2000] 1 Lloyd’s Rep 522, 524 (English Court of Appeal); Fletamentos Maritimos SA v Effjohn Int’l BV [1996] 2 Lloyd’s Rep 304 (QB); Nova (Jersey) Knit Ltd v Kammgarn Spinnerei GmbH [1977] 1 Lloyd’s Rep 463 (House of Lords).

  • –  In Switzerland see, eg Judgment of 28 July 1988, 7 ASA Bull. 304 (Bülach District Court of Zurich) (1989).

  • –  In Germany see, eg Judgment of 19 October 2000, 16 Sch 01/00, reported at http://www.dis-arb.de (Oberlandesgericht Schleswig); Judgment of 28 November 1963, 1964 NJW 591, 592 (German Bundesgerichtshof); Judgment of 5 December 1994, 13 ASA Bull 247 (Oberlandesgericht Dresden) (1995).

213  ibid.

214  See, eg Award in Zurich Chamber of Commerce, Case No 273/95 (31 May 1996), XXIII YBCA 128 (1998); Société Ouest Africaine des Bétons Industriels v Republic of Senegal, ICSID Award No ARB/82/1 (25 February 1988), XVII YBCA 42 (1992); Award in Bulgarian Chamber of Commerce and Industry, Case No 60/1980 (1 October 1980), XII YBCA 84 (1987); Award in ICC Case No 8708, discussed in Grigera Naón, Choice-of-Law Problems in International Commercial Arbitration, 289 Recueil des Cours 9, 120 (2001); Final Award in ICC Case No 5759, XVIII YBCA 34 (1993); Interim Award in ICC Case No 4367, XI YBCA 134 (1986), cited by Born, p 1112, footnote 234.

215  See, eg Award in ICC Case No 10526, 126 JDI (Clunet) 1179, 1180–1181 (2001).

216  Born, p 1113. See, eg Choctaw Generation Ltd Partnership v American Home Assurance Company, 17(1) Mealey’s IAR C-1 (2002) C-2 (2d Cir 2001); see also JA Jones, Inc et al v The Bank of Tokyo-Mitsubishi Ltd et al, XXV YBCA 902 (2000) 904 (EDNC 1999).

217  Lew, Mistelis, and Kröll, para 7–47, which in footnote 58 observe that ‘Under US law this may be so even where the subcontract contains a reference to the main contract, the arbitration clause of which is, however, in its wording limited to the original parties. See the decision in Intertec Contracting A/S et al v Turner Steiner International SA, XXVI YBCA 949 (2001) 955, para 15-21, 34 (SDNY 2000, 2d Cir 2001).’

218  Lew, Mistelis, and Kröll, para 7–48, referring to Grundstatt v Ritt, 106 F 3d 201 (7th Cir 1997).

219  The term ‘Court’ clearly means the International Court of Arbitration of the ICC.

220  Art 6(4)(ii) of the ICC Rules (2012). Emphasis added.

222  ibid.

224  See, eg Judgment of 14 May 1996, Société Sigma Corp v Société Tecni-Ciné-Phot, 1997 Rev Arb 535 (French Cour de Cassation civ 1e); Judgment of 5 March 1991, Pepratx v Fichou, 1992 Rev Arb 66 (French Cour de Cassation com). See also Judgment of 25 March 1983, Sorvia v Weinstein Int’l Disc Corp, 1984 Rev Arb 363 (Paris Cour d’Appel); Judgment of 18 March 1983, Société Quémener et Fils v Société Van Dijk France, 1983 Rev Arb 491 (Paris Cour d’Appel); Judgment of 9 December 1987, GIE, Acadi v Thomson-Answare, 1988 Rev Arb 573 (Paris Cour d’Appel); Judgment of 8 March 1995, 1997 Rev Arb 547 (Paris Cour d’Appel); Judgment of 21 June 1990, Compagnie Honeywell Bull SA v Computacion Bull de Venezuela CA, 1991 Rev Arb 96 (Paris Cour d’Appel), cited by Born, p 1116, footnote 250.

225  On the necessity of a ‘close connection’ see Youssef, pp 133 et seq.

226  See the court decisions cited by Born, pp 1116 et seq, footnotes 251 et seq:

  • –  In the United States see, eg Nestle Aters N Am, Inc v Bollman, 2007 WL 2962842 (6th Cir 2007); Hart Enter Int’l, Inc v Anhui Provincial Imp & Exp Corp, 888 F Supp 587 (SDNY 1995); Hinson v Jusco Co, 868 F Supp 145 (DSC 1994); GD Searle & Co v Metric Constr, Inc, 572 F Supp 836 (ND Ga 1983); Primex Int’l Corp v Wal-Mart Stores, Inc, 657 NYS 2d 385 (NY 1997).

  • –  In Germany see, eg Judgment of 31 May 2007, III ZR 22/06, 2007 SchiedsVZ 215, 216–217 (German Bundesgerichtshof); Judgment of 27 February 2004, 2004 SchiedsVZ 161, 162 (Oberlandesgericht Düsseldorf); Schlosser in Stein and Jonas (eds), para 20 at §1029 ZPO.

  • –  In Switzerland see, eg Judgment of 15 March 1990, Sonatrach v KCA Drilling Ltd, 1990 Rev Arb 921 (Swiss Federal Tribunal).

227  See, eg Award in ICC Case No 5117, in Jarvin, Derains, and Arnaldez, pp 274, 275; Final Award in ICC Case No 6998, XXI YBCA 54 (1996); Interim Award in ICC Case No 7929, XXV YBCA 312 (2000); Partial Award in ICC Case No 8420, XXV YBCA 328 (2000). Cf Shenzhen Nan Da Indus Trade United Co v FM Int’l Ltd, XVIII YBCA 377 (HK High Court, S Ct 1991) (1993), cited by Born, p 1117, footnote 254.