On 26 April 2016, the Stockholm Chamber of Commerce (“SCC”) released its draft Arbitration Rules 2017 which propose the introduction or development of provisions relating to multi-party and multi-contract disputes.
Disputes governed by arbitration clauses can involve more than two parties, more than one contract, or both. In these cases, parties often prefer to have one set of proceedings. There are obvious advantages in terms of costs savings and it can also avoid inconsistent determinations where common factual or legal issues are in question.
In the absence of express provisions in this regard, parties may have in the past sought to persuade tribunals that they had the power to join parties or consolidate arbitrations. Rules often contained little to no reference as to the power of institutions or tribunals to do so.
Arbitral institutions have recognised this and are developing their rules to better accommodate the increasing complexity and sophistication of disputes. For example, in January this year SIAC issued revised draft Arbitration Rules which propose to introduce specific provisions on multiple-contract disputes and consolidation, as well as to develop those regarding joinder of additional parties.
With institutions around the world aiming to establish themselves as the institution of choice for complex multi-party and multi-contract disputes, it is possible we will see the major institutions continue to develop their rules in this respect.
Below is an overview of the different institutions’ approaches to the issues of:
- joinder of a third party to an existing arbitration; and
- consolidation of separate but related arbitrations (potentially involving different arbitration agreements and/or parties).
- Under the proposed SCC Rules, a provision for joinder will be added, allowing the SCC Board of Directors (“Board”), at the request of a party, to join an additional party to an arbitration, even where claims are made under separate arbitration agreements.
- Not all institutions provide this flexibility in terms of joinder under separate arbitration agreements. For example, the ICC and SIAC rules only allow joinder where the additional party is party to the same arbitration agreement.
- Under the proposed SCC Rules, the Board is still able to consolidate two or more sets of related arbitrations; however, further guidance is provided in regard to relevant factors which the Board is to consider in its decision-making procedure.
- The proposed SCC Rules retain the current requirement for the Board to consult with the parties and the tribunal before consolidating proceedings. This position is substantially the same as the conditions for consolidation under the HKIAC rules, but differs from the position under the ICC and LCIA rules (under which such consultation is not required). The ICDR rules are unique in that a request for consolidation is decided by a consolidation arbitrator appointed by the Administrator.
The proposed SCC Rules explicitly permit the Board to allow multi-contract claims to be raised in the same arbitration in certain circumstances.
This is broadly in line with the positions of the ICC, ICDR and HKIAC rules, which also allow multi-contract claims to be heard in a single arbitration (subject to certain conditions), while the LCIA rules implicitly allow such claims. Until the proposed revised SIAC rules come into effect, there will be no express provision allowing for multi-contract claims in a SIAC arbitration.
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