MULTIPLE PARTY ACTIONS IN INTERNATIONAL ARBITRATION

Transcription

1 MULTIPLE PARTY ACTIONS IN INTERNATIONAL ARBITRATION Permanent Court of Arbitration OXTORD UNIYERSITY PRESS

2 CONTENTS SUMMARY List ofcontributors Table ofcases Table oflegislation List ofabbreviations Introduction xxxi xxxv xlix li lvii I DEFINING THE PROBLEM: WHO ARE THE PROPER PARTIES TO THE ARBITRATION? 1 Non-signatories and International Arbitration: An Arbitrator s Dilemma 3 WilliamW. Park I. Introduction 3 II. Less-than-obvious Patties 5 A. TheBasics 5 B. A Word on Taxonomy: Unsigned Agreements 8 C. The Devil in the Detail: Relevant Criteria 10 III. Transnational Norms 11 A. Governing Law 11 B. Arbitral Precedent 12 C. Deemed Consent 14 IV. The Lex Societatis 18 A. Veil-piercing 18 B. The Place oflncorporation 19 V. The "Group of Companies" Doctrine 22 A. The Dow Cbemical Award 22 B. Consenting Non-signatories 23 C. Impact in Practice 25 VI. Conclusion - x AppendŁs: Illustrative Arbitral Awards A. Awards on consent 28 ix

3 B. Awards on corporate personality 30 C. Awards with hybrid reasoning 31 D. Award comparison chart 33 2 Multiple Parties and Multiple Contracts in International Arbitration 35 Bernard Hanotiau I. Thelssues 35 A. Non-signatories in International Arbitration 35 B. Groups ofcompanies and GroupsofContracts 36 C. "Extension" of the Arbitration Clause to Non-signatories is a Misleading Concept, as Consent is Required 37 D. The "Group of Companies" Doctrine is Inadequate to Explain Extension of the Arbitration Clause 37 E. The "Group of Companies" Doctrine is Not Always the Appropriate Analysis 39 F. Inappropriate Use of the Concept of "Piercing the Corporate Veil" 40 G. Distinguishing the Non-signatory Issue from the Issues of Joinder and Consolidation 40 H. Do the Issues of Extension of an Arbitration Clause to a State and to a Company Arise in the Same Terms? 41 I. Procedurę and Strategy 43 II. The Impact of the Requirement that the Arbitration Clause be in Writing 44 III. Review of the Case-law Relating to Extension of the Arbitration Clause to Non-signatory Companies 45 A. The Factual Scenarios 45 B. Conclusions Regarding Groups of Companies from the Review 46 IV. Review of the Case-law Relating to Extension of the Arbitration Clause to a State 50 A. Extension of the Arbitration Clause to a State as Additional Respondent 50 B. Extension of the Arbitration Clause to a State as Additional Claimant 55 V. The Challenge of Awards by Non-signatory Companies and States 58 VI. Reviewof the Case-law Relating to Groupsof Contracts 63 A. The Factual Scenarios 63 B. Conclusions from the Review 66

4 VII. Conclusion 57 3 "Consent" to Arbitral Jurisdiction: Disputes with Non-signatories 69 Alan Scott Rau I. Introduction 59 II. Is there a Valid Agreement to Arbitrate? 7 ] A. The Problem 71 B. Is There a Valid Agreement to Arbitrate Anything at Ali? 76 C. With Whom Am I Obligated to Arbitrate? 86 III. WhatTypes of Disputes did the Arbitration Agreement Encompass? 87 A. The Significance of First Options 87 B. The U.S. Supreme Court s Recent Holding in Pacificare 88 C. The Tendency in the Lower Courts 90 D. Institutional Rules 92 E. What.Then.AreWeEntitledtoPresume? 95 IV. With Whom am I Obligated to Arbitrate? 102 A. Who.Whom? 108 B. Enforcing Arbitration against a Non-signatory 111 C. Enforcing Arbitration against a Signatory 122 V. Under What Conditions has Consent to Arbitrate been Given? 135 VI. Limiting Statutory Remedies 140 VII. Conclusion Beyond Consent: Applying Alter Ego and Arbitration Doctrines to Bind Sovereign Parents 149 Timothy Tyler, Lee Kovarsky, Rebecca Stewart I. Introduction 149 II. Binding Private Parties to Arbitrate as Alter Egos 151 A. A Brief History of Veil-piercingTheory and Law in the United States 151 B. The Presumption of Limited Liability in Contract Cases and its Application to Arbitration 155 III. Piercing the Corporate Veil to Reach Sovereign Corporate Parents ' 65 A. First City National Bank v. Banco Para el Comercio Exteńor de Cuba ' 65 B. The Foreign Sovereign Immunities Act Frequendy a Red Herring IV. Bridas u Turkmenistan and its Implications 180 ' ~^~

5 A. BridasJ 181 B. BridasII 184 C. QuestionsRemainingAfter.firtói«185 5 Extension of the Arbitration Clause to Non-signatories under French Law 189 Pierre May er I. Introduction 189 II. The "Group of Companies" Doctrine 190 III. Participation in the Performance of the Contract 191 A. Decisions of the Paris Court of Appeal 191 B. Decisions of the Cour de cassation 192 IV. Transfer of the Contract or of a Contractual Right 194 A. Transfer of a Contract 195 B. Transfer of a Single Contractual Right 196 C. Consent to be Bound 197 D. Transmission under French Law 198 V. Conclusion 198 II THE INSTITUTIONAL PERSPECTIVE 6 Multiparty Arbitration:The ICC International Court of Arbitration Perspective 203 Annę Marie Whitesell I. Introduction 203 II. Setting in Motion of the Procedurę 204 A. TheParties 204 B. Joinder 206 III. Constitution of the Arbitral Tribunal in Multiparty Arbitrations 207 IV. Consolidation of Cases Involving Multiple Parties 209 V Costs 211 VI. Conclusion Multiple Parties, Multiple Problems: A View from the London Court of International Arbitration 213 Adrian Winstanley I. Introduction 213 II. TheLimitsof the Institutions Role 213 xii

6 III. The Institution and the Parties 214 IV. The LCIA Arbitration Rules 215 A. Multiple Parties and Party Nomination of Arbitrators 21 5 B. Joinder and Consolidation 216 V. Costs 219 VI. The 1996 English Arbitration Act 220 VII. Conclusion Consolidation of Arbitral Proceedings in the Nedierlands: The Practice and Perspective of the Nedierlands Arbitration Institute 221 Jan Willem Bitter I. Introduction: the Issue of Consolidation 221 A. Two Examples 221 B. How Consolidation Can be Achieved 222 II. Consolidation under the Netherlands Arbitration Act 223 A. Procedurę 223 B. Consolidation May be Expressly Excluded 225 III. The Netherlands Arbitration Institutes Position on Consolidation 225 IV. Case-law Between 1986 and A. Rejectionsof Reąuests for Consolidation 227 B. A Consolidation Order Does Not Amount to a Decision on Jurisdiction 229 V. Alternatives: Consolidation without Court Involvement 230 A. A///ofMeasures 230 B. Proceedings Conducted under Other Procedural Rules 232 VI. A ReviewoftheStatutory System 232 A. General Considerations 233 B. Consolidation in Practice "35 VII. A Recent Proposal for the Legał Regime to be Modified 235 VIII. Conclusion III MULTIPLE PARTIES AND INVESTMENT ARBITRATION 9 Multiple Claimants in Investment Arbitration: Shareholders and Other Stakeholders 239 R. Doak Bishop xiii

7 I. Introduction 239 II. ICSID Convention, Article 25: Jurisdiction Ratione Personae 240 A. Introduction 240 B. ImmediateOwneroftheInvestment 241 C. IntermediateOwneroftheInvestment 244 D. UltimateOwnerofthe Investment 244 III. VerticalShareholderClaims 245 IV. Horizontal Shareholder Claims: Shareholders from DifFerent Countries Claiming Under Different Bilateral Investment Treaties 246 V. Contractual Non-signatory Affiliates as Claimants 247 VI. Representative Claims under a Bilateral InvestmentTreaty 248 VII. Multiple Party Claims under Different Instruments 249 VIII. Potential Inconsistent Outcomes with Separate Cases 249 IX. Assignments and Successors 250 X. Conclusion Multiple Party Investment Dispute Resolution: Who are the Proper Parties? 255 Alexandra Koutoglidou I. Introduction 255 II. Multiplying the Defendable State Measures: the State and State Enterprises 258 A. Lifting the Corporate Veil of State Enterprises 258 B. A Procedurę for Each Personality of the "Contracting State" as Party to the Dispute 263 III. Multiplying the Beneficiaries of Actionable Claims: the Private Enterprise and its Shareholders 266 A. Lifting the Corporate Veil of Private Enterprises 266 B. A Procedurę for Each Personality of the "Investor" as Party to the Dispute 275 V. Conclusion 278 xiv

8 11 The Manifold Respondent: Multiparty Issues Involving States in Investor-State Arbitration 281 Vaughan Lowe I. Introduction 281 II. "The State" as Respondent in Investment Arbitration 282 A. Practical Problems 282 B. Technical Problems 284 III. Enforcement of Arbitral Awards against States 285 A. Is the State Bound by the Award? 286 B. IsThis the States Property? 287 C. Immunity and the Different Facesof the State 291 IV. Conclusion: Fairness and Equity in Enforcement 293 IV MASS CLAIMS AND CLASS-WIDE ARBITRATION 12 Arbitrating Mass Investor Claims: Lessons of International Claims Commissions 297 Veijo Heiskanen I. Introduction 297 II. The "Glorious Past" of International Claims Commissions and Claims Tribunals 299 III. Classification of International Claims Commissions and Claims Tribunals 303 A. Claims Commissions v. Claims Tribunals 303 B. State Responsibility Paradigm v. Human Rights Paradigm 305 IV. Mass Claims Processing Methods and Techniques 308 A. General Observations 308 B. Computerization 312 C. Delegation of Claims Review 314 D. Grouping of Claims and Common Issue Determination 31 5 E. Cover Decisions 316 F. Discovery of Evidence ex officio 317 G. Evidentiary Presumptions 318 H. Relaxed Standard ofproof 319 I. Statistics '<-' V. Conclusion "* xv

9 13 The Administration of Class Action Arbitrations 325 Eric P. Tuchmann I. Introduction 325 II. Class Action Litigation 325 III. Green Tree Financial Corp. v. Bazzle 327 IV. Class Action Procedures: AAA's Supplementary Rules for Class Arbitrations 329 V. Court Review of Class Action Awards 331 A. The Jurisdictional Issue 331 B. The Standard ofreview 332 C. Case Examples 332 VI. International Class Action Arbitrations 334 VII. Conclusion Class-wide Arbitration in California 337 Richard Chernick I. Introduction 337 II. The California Arbitration Act 338 III. The United States Supreme Court Decides Bazzle 340 IV. Arbitral Institutions Respond to Bazzle 342 V. Standard of Review of Arbitral Awards 343 VI. Actual Institutional Experience in Administering, Managing, and Deciding Class-wide Arbitrations Sińce Bazzle 345 A. A Word About Class Preclusion or Waiver Clauses 345 B. Clause Construction: The Reasoned Partial Finał Award 346 C. Class Certification 346 D. Notice to Class Members 348 E. Management of the Pre-hearing and Hearing Process 348 F. Attorney Fee Awards 349 G. The Finał Award 349 H. Settlement, Voluntary Dismissal, and Compromise 349 I. Confidentiality 350 VII. Conclusion 350 XVI

10 V ENFORCEMENT ISSUES 15 The Globalization of American Class Actions: International Enforcement of Class Action Arbitral Awards 355 Alexander Blumrosen I. Introduction 355 II. The Enforcement of International Class Action Court Judgments 356 III. The Enforcement of Class Action Arbitral Awards 364 A. Class Action Waivers 368 B. The Validity of an Opt-Out Class in Arbitration 369 C. Notice 370 IV. Conclusion Complex Arbitration: Issues in Enforcement and Annulment Actions of Arbitral Awards under French Law 375 Dominiąue T. Hascher I. Introduction 375 II. The Existence and Scope of an Arbitration Agreement: Anicie 1502(1) 376 A. Joinderof Parties 377 B. Consolidation of Actions 379 III. Irregular Constitution of the Arbitral Tribunal: Article 1502(2) 384 A. Appointment of Common Arbitrators in Related Proceedings 384 B. Nomination of the Same Co-arbitrator in Related Cases 384 C. Nomination of an Arbitrator Involved in a Prior Related Case 385 D. Equality of the Parties in the Constitution of the Arbitral Tribunal: The Dutco Case 386 IV. Violation of International Public Policy: Article 1502(5) A. The PrincipleofEqualityof the Parties 388 B. Responses to the Dutco Decision 388 C. The Dutco Decision in Context 389 V Conclusion xvii

11 VI PRACTICAL SOLUTIONS TO MULTIPARTY PROBLEMS 17 MultipartyArbitrationintheConstructionlndustry 395 John Marrin I. Introduction 395 II. Categories of Multiparty Dispute 395 III. Attitudes to Multiparty Arbitration 397 IV. TechniąuesforlntroducingaThirdParty 400 V. Contractual Provision 401 VI. Incorporation oflnstitutional Rules 407 VII. State Court Intervention 409 VIII. Conclusion 412 APPENDICES Appendix 1: Article 1046 of the Netherlands Code of Civil Proceedings: Consolidation of Arbitral Proceedings 413 Appendix 2: Supplementary Rules for Class Arbitrations American Arbitration Association 415 Appendix3: JAMS Class Action Procedures 421 Appendix 4: Clause 18 of the Blue Form of Sub-Contract for Use in Conjunction with the Institution of Chemical Engineers ("ICE") Conditions 425 Bibliography xviii