Comparative Exploration On Third-Parties Of International Commercial Arbitration

With more complex and diverse international commercial transactions, multipleparties, chain of contracts, transfer of rights and obligations, group of companies,agent and representative as well as other complicated legal issues emerge promptlyand get into a relative high speed track, and arbitration practice has a dire demand forThird-Parties system. In addition, with continual innovations of contemporary legaltheory and constant breaks upon old doctrines, former ideas that shackle people'sbrains on the issue of arbitral Third-Parties have come into dissolution gradually.Many theoretic researchers and practical handlers have plunged into exploration andanalysis on the possibility and rationality of establishing Third-Parties system intoarbitration. Meanwhile, some countries have introduced Third-Parties system intoarbitration mechanism and operated this new system in their arbitration procedures.Based on the introduction of preliminary knowledge of arbitral Third-Parties,this paper comprehensively analyzes many countries' existing legislations andarbitration rules of many arbitration organizations related to arbitral Third-Parties,then introduces and explores deeply theories upholding arbitral Third-Parties in the world, then constructs a complete and all-round theoretical groundwork for arbitralThird-Parties system and establishes a full practical procedure of arbitral Third-Partiessystem, and at last probes fully into the question if and how to introduce arbitralThird-Parties system during the revision of China Arbitration Law, and then submits acorresponding legislative suggestion. There are eight chapters in this paper and thetotal word amount is over 320,000.The title of the first chapter of this paper is Basic Issues of arbitral Third-Parties.In this chapter, this paper focuses on three main issues, namely, definition of arbitralThird-Parties, civil litigation Third-Parties and arbitral Third-Parties, practicaldemand and theoretical argument of arbitral Third-Parties. Based upon comprehensivecomments on existing opinions of arbitral Third-Parties' definition, this paper submitsa more mature definition of arbitral Third-Parties and gives an all-sided explanationon this definition. Further more this paper introduces five categories related to arbitralThird-Parties. They are respectively Classwide Arbitration, String Arbitration,Concurrent Hearing, Multi-party Arbitration and Extension of Arbitration Clause.This paper believes that understanding and grasp of litigation Third-Parties system isa basis and premise for knowing precisely what arbitral Third-Parties system is.Firstly this paper analyzes comprehensively China existing civil litigationThird-Parties system, then deeply discusses systematic reconstruction of China civillitigation Third-Parties system, and finally submits an innovative argument on thispoint. This paper discusses deeply the reason for existence of civil litigationThird-Parties system, and then analyzes the connection and difference betweenlitigation Third-Parties system and arbitral Third-Parties system. Based on theintroduction of three arbitral cases, this paper analyzes a practical demand for arbitralThird-Parties system, and then introduces all-round positive and negative opinions ofarbitral Third-Parties system at present, and then gives a personal comment on everyopinion.The title of the second chapter of this paper is Consolidation of Arbitration. Inthis chapter, this paper firstly talks about the definition of Consolidation of Arbitrationand the difference and connection between Consolidation of Arbitration and arbitral Third-Parties, then introduces a debate upon the rationality of Consolidation ofArbitration presently and submits an personal opinion of this paper, and at lastintroduces many countries' legislation and many arbitration organizations' arbitrationrules related to Consolidation of Arbitration in the world and makes a summary andanalysis on these legislations and arbitral rules. The countries introduced by this paperwhich legislation is related to Consolidation of Arbitration include Australia, Canada,Holland, the United States, Britain, and New Zealand. The arbitration rules thatregulate Consolidation of Arbitration issue include Swiss Rules of InternationalArbitration, The Japan Commercial Arbitration Association Commercial ArbitrationRules, CEPANI (Belgian centre for mediation and arbitration) Arbitration Rules, andThe Chartered Institute of Arbitrators Arbitration Rules.The title of the third chapter is Existing Legislation and Arbitration Rules ofArbitral Third-Parties. In this chapter, this paper firstly introduces many countries'legislations related to Arbitral Third-Parties, including Holland, Belgium, Britain, theUnited States and France, then introduces many arbitration rules related to ArbitralThird-Parties, including Rules of Arbitration of the International Chamber ofCommerce (ICC), Arbitration Rules of The London Court of International Arbitration(LCIA), Swiss Rules of International Arbitration, Rules of Arbitration ANDCONCILIATION of The International ARBITRAL CENTRE of The AUSTRIANFEDERAL ECONOMIC CHAMBER (VIENNA Rules), American ArbitrationAssociation (AAA) International Dispute Resolution Procedures, Arbitration Rules ofAssociation France Arbitration (AFA), London Maritime Arbitrators AssociationTerms, Rules of The Singapore International Arbitration Center(SIAC), The JAPANCommercial Arbitration Association Commercial Arbitration Rules, Arbitration Rulesof The NETheRLANDS Arbitration INSTITUTE, Arbitration Rules of Court ofArbitration FOR SPORTS (CAS), and CHAMBER of COMMERCE ANDINDUSTRY of GENEVA (CCIG) Arbitration Rules, further summarizes and analyzesthe above foreign countries' legislations and arbitration rules related to arbitralThird-Parties, and at last illustrates legislations, arbitration rules and arbitrationpractice of arbitral Third-Parties in China. The focus of the fourth and fifth chapters of this paper is Foreign Countries'Positive Theories of arbitral Third-Parties. In these two chapters, this paper introducesand analyzes fifteen in all positive theories of arbitral Third-Parties in this world atpresent, which basically cover all the positive theories of arbitral Third-Parties in thisworld at present.In the fourth chapter, this paper firstly talks about Agent Theory and ArbitralThird-Parties. This chapter introduces a basic situation of Agent Theory inAnglo-American law system and Continental Legal System, and an application ofAgent Theory making arbitration clause bind non-signatories, then illustrates threearbitral cases related to Agent Theory, namely, Marine Drive Complex v. Ghana,Andersen Consulting Business Unit Member Firms v. Arthur Andersen Business UnitMember Firms, and Pritzker v. Merrill Lynch, Pierce, Fenner & Smith, and at lastcomments China relevant legislation and practice.Next, the fourth chapter talks about an application of Estoppel in arbitrationsystem, and introduces respectively MS DEALER SERVICE CORP. v. Sharon D.FRANKLIN, Hughes Masonry Co. v. Greater Clark County School Bldg. Corp., andRoberson v. The Money Tree of Alabama, Inc, three cases that join in Third-Partiescomplying with Estoppel, and at last comments China relevant legislation andpractice.Again, based upon the discussion of basic theory of Privity of Contract andThird-Party Beneficiaries, the fourth chapter deeply argues an application ofThird-Party Beneficiaries making arbitration clause bind non-signatories, and thenuses Spear, Leeds & Kellogg v. Central Life Assur. Co., Boyd v. Homes of Legend,and Hugh Collins v. International Dairy Queen, Inc. as examples for furtherdiscussion of this theory, and at last comments China relevant legislation and practice.Then, the fourth chapter introduces a basic content of piercing the corporate veil/confusion/alter ego theory and an application of this theory for joining inThird-Parties, and concretely analyzes three cases applying this theory to join inThird-Parties, namely, Fisser V. International Bank, ICC no. 6000 of 1988, and TheOrri case, and at last comments China relevant legislation and practice. Finally, the fourth chapter illustrates a situation of joining in Third-Parties duringthe transfer of rights and obligations. In this part, the fourth chapter explains arationality and necessity of existence of arbitral Third-Parties in four aspects whichare transfer of contractual rights and obligations, merger and division of legal persons,subrogation, and transfer of Bill of Lading, and concretely analyzes ten typical cases.In the fifth chapter, the paper respectively introduces Group of CompaniesDoctrine, Groups of Contracts, Conduct as an Expression of Implied Consent or as anAlternative to Consent, Incorporation by reference, Assumption, Existence BetweenThe Parties of A Community of Rights and Interests, Equity, Equality Between theParties, Granting the Full opportunity to Present Their Case, and Fair and ReasonableExpectations, and then concretely analyzes practical cases applying these theories tojoin in Third-Parties.The last section of the fifth chapter gives a deep comment on foreign countries'positive theories of arbitral Third-Parties, points out three main characteristics ofthese theories, and further submits author's some learning and understanding.The title of the sixth chapter is Construction of theoretical basis of arbitralThird-Parties System, which is the most important chapter in this paper. This chapteranalyzes deeply a rationality and necessity of existing of arbitral Third-Parties in fivevisual angles which are a relationship between value orientation of arbitration andautonomy of parties, the nature of arbitration, a relationship between substantive lawsand procedure laws, the Economics of the Law, and Marxist political economy. Thepaper says that it's of great significance of precise understanding a relationshipbetween value orientation of arbitration and autonomy of parties. The valueorientation of arbitration is to produce efficient and just arbitral awards, not autonomyof parties which is only a formal and exterior characteristic of arbitration system.Therefore, if non-existence of arbitral Third-Parties leads that arbitration system cannot produce efficient and just arbitral awards, the existence of arbitral Third-Partiesshall possess rationality and necessity even though arbitral Third-Parties couldconstrain autonomy of parties in some extent. The paper says that the nature ofarbitration system consists of contractual nature and judicial nature. The circumstance of joining in arbitral Third-Parties without consensus of all parties is just arepresentation of judicial nature of arbitration system, which can reflect a rationalityof existence of arbitral Third-Parties. The paper says that as a procedure lawarbitration system must reflect and embody substantive laws, and regulations relatedto rights and obligations of Third-Parties in substantive laws are a solid and firmfoundation for existence of arbitral Third-Parties. The paper says that a basic conceptof the Economics of the Law requires that operations of laws must reflect efficiency.Non-existence of arbitral Third-Parties leads that the cost parties need to resolvedisputes ascend and time is prolonged, which is in contrary to a basic concept of theEconomics of the Law. Therefore, based on the Economics of the Law, the existenceof arbitral Third-Parties do have rationality and necessity. This paper believes that theprinciple that the superstructure serves for and is decided by its economic basepointed out by Marxist political economy is the most basic and important reason forthe rationality and necessity of arbitral Third-Parties.The title of the seventh chapter of this paper is An Exploration of PracticalOperations of Arbitral Third-Parties. There are four issues addressed in this chapter.Firstly, the paper discusses nomination of arbitrators when arbitral Third-Parties exist.With an introduction of New Zealand Arbitration Act, Spanish Arbitration Act, Rulesof Arbitration of the International Chamber of Commerce (ICC), Arbitration Rules ofThe London Court of International Arbitration (LCIA), Swiss Rules of InternationalArbitration, American Arbitration Association International Dispute ResolutionProcedures, Arbitration Rules of Association France Arbitration (AFA), and Rules ofThe Singapore International Arbitration Center(SIAC), the paper summarizes somebasic criterion of nomination of arbitrators when arbitral Third-Parties system isapplied. Secondly, the paper talks about the authority and applicable laws, arguingthat arbitration organizations, arbitral tribunals and courts are all authorities and thenconcretely discusses the power assignment among these three entities, andadditionally as to applicable laws this paper believes that application ofDenationalization Theory has a positive significance for application of arbitralThird-Parties. Furthermore, with a model case the paper concretely analyzes consideration of parties' will when joining in arbitral Third-Parties, believing thatwhether or not the Third-Parties are willing to join into arbitral procedures is not adecisive factor of decision if the Third-Parties shall be joined into arbitration, and ifall parties of original arbitration procedure disagree to join into Third-Parties,authorities have no power to join in the Third-Parties. At last, the paper talks abouttwo practical operative issues related to arbitral Third-Parties, namely, recognition andenforcement of arbitral awards and an assignment of arbitral fees.The title of the eighth chapter is Revision of China Arbitration Law and ArbitralThird-Parties. In this chapter, the paper firstly introduces the development of Chinaarbitration system, including domestic arbitration, foreign-related arbitration, andrelated information of Arbitration Law of the People's Republic of China, and thenanalyzes comprehensively if and how to legislate arbitral Third-Parties system duringthe revision period of China Arbitration. The paper says the existence of arbitralThird-Parties embodies rationality and necessity in view of the whole arbitrationsystem and considering our country's modern arbitration system and the developmentof national economy, there is no reason for us to refuse arbitral Third-Parties system.The paper comprehensively discusses the design of law articles of arbitralThird-Parties and submits a suggestive version of law articles. At last the paper talksabout three temporary approaches avoiding negative effects of non-existence ofarbitral Third-Parties before China establishes arbitral Third-Parties systemcompletely, namely, nomination of the same arbitrators, sharing proof and material ofdifferent dispute resolution procedures, and provisions of arbitral Third-Parties inarbitration rules and arbitration agreements.