Which of the ICC, LCIA, HKIAC and SIAC rules, if any, is most adapted to resolving multi-party and multi-contract disputes?
Multi-party arbitration may occur under the situations; (i) several parties to single contract "multi-party arbitration" and (ii) several parties to several contracts "multi-contract arbitration".
Due to the involvement of more than one party in the many contracts; a number of arbitration institutions have included the joinder and/or consolidation provisions in order to extend the effect of their arbitration clauses.
Joinder Provisions
According to the article 4.2 of Swiss Rule, the article 27 of HKIAC, the article 15 of ACICA, and the Article 17.5 of UNCITRAL rules, both the joinder and intervention mechanisms are accepted without requiring the consent of the existing parties. In this regard, a party can request for an additional party to be joined to the proceedings and also additional party can demand to be joined or intervene in the existing proceedings. However, in the ICC, SCC, and the LCIA Rules, being a joinder to the existing proceedings is restricted. Alternatively, it is suggested that under these rules, one party start a separate arbitration proceeding and apply consolidation the proceedings like a 'indirect joinder'.1
When we review the stage for applying as a Joinder under these rules, it is understood that the SIAC, HKIAC, ACICA rules are more flexible than the other rules and "respectively SIAC, HKIAC, and ACICA, determine joinder pre-constitution of the arbitral tribunal and request for joinder are determined by the arbitral tribunal post-constitution of the tribunal." Also, it is noted that under the ICC Rules, ICC Court determines the request for joinder that is a pre-arbitrator appointment issue under this rule, so unless otherwise agreed by the parties, no additional party determined as a joinder after the appointment of an arbitrator. Besides, under Swiss, SCC, LCIA, and UNTICRAL rules, joinder is considered as a post-constitution of the arbitral tribunal issue. Apart from above, according to article 8.1 of SIAC rules, the party never preclude from applying again to the tribunal.2
Consolidation Provisions
The consolidation process is accepted under the rules of SCC, SIAC, HKIAC and ACICA. Unlike those rules, according to article 10 of ICC; consolidate two or more arbitrations pending under the ICC into a single arbitration, can be possible if (i) "the parties have agreed to consolidation or (ii) all of the claims in the arbitrations are made under the same arbitration agreement or (iii) where the claims in the arbitrations are made under more than one arbitration agreement, the arbitrations are between the same parties, the disputes in the arbitrations arise in connection with the same legal relationship, and the Court finds the arbitration agreements to be compatible."
Similarly, under Article 22 of LCIA, the power of consolidation is conferred two or more arbitration the to tribunal by providing that the consent of all parties or LCIA Rules commenced under the same or compatible arbitration agreement(s) between same parties and no tribunal is formed.
Unlike these rules, the Swiss Rules, in article 4.1. gives wide discretion to the SAC for deciding the consolidation on the basis of a notice of arbitration and does not require a party to consolidation3.
In conclusion;
It will be difficult to choose the best and more adaptable international rule on multiple parties and multiple contracts. Provided that all the contracts and the disputes shall be evaluated in separately, "the ICC, Swiss, SCC, LCIA, SIAC, ACICA HKIAC rules all provide a means by which arbitration proceedings involving disputes among multiple parties and/or under multiple contracts can be managed in an effective and cost-efficient manner, of varying scope"4. Also making a prediction for the future disputes arisen from multi-party and multi-party contracts is another challenge for the parties but for their existing contracts the party may make an assessment whether their contract is compatible with the articles of international rules related to being a joinder, consolidation process or not.
Footnotes
1 Gordon Smith, "Comparative Analysis of Joinder and Consolidation Provisions Under Leading Arbitral Rules", in Maxi Scherer (ed), Journal of International Arbitration, ( Kluwer Law International 2018, Volume 35 Issue 2) pp. 189-190
2 Gordon Smith, "Comparative Analysis of Joinder and Consolidation Provisions Under Leading Arbitral Rules", in Maxi Scherer (ed), Journal of International Arbitration, ( Kluwer Law International 2018, Volume 35 Issue 2) pp. 173-202
3 Gordon Smith, "Comparative Analysis of Joinder and Consolidation Provisions Under Leading Arbitral Rules", in Maxi Scherer (ed), Journal of International Arbitration, ( Kluwer Law International 2018, Volume 35 Issue 2) pp. 195-196
4 Gordon Smith, "Comparative Analysis of Joinder and Consolidation Provisions Under Leading Arbitral Rules", in Maxi Scherer (ed), Journal of International Arbitration, ( Kluwer Law International 2018, Volume 35 Issue 2) pp. 201-202
Originally published May 29, 2020.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
