On The Extension Of The Effectiveness Of The Arbitration Agreement

The principle of Parties' Autonomy is the foundation of arbitration.Parties' autonomy, that is the consent of both parties, is representedby the arbitration agreement signed by the parties concerned.According to traditional arbitration theories, the legal feature ofarbitration agreement is commercial agreement. And therefore thelegal effect of arbitration agreement should be decided pursuant tothe basic principles and rules of contract law. According to theprinciple of parties' autonomy and the principle of privity of contract,the arbitration agreement binds only the parties who have signed thearbitration agreement. As the economic and legal environmentchanges, the principle of privity of contract has been partly brokenthrough and a series of exceptions to the principle have beendeveloped out of practice. Under these exceptional circumstances,can the arbitration clause be extended to non-signatories just like thecontract itself? Is there any relevant provision on this issue ininternational arbitration treaties and domestic arbitration laws ? Ifnot, what theories do courts and tribunals apply when dealing withthe extension of arbitration agreement? What is the standing ofChinese legislature and judicial organization towards the extension ofarbitration agreement ? For the purpose of solving these issues, thispaper reviews and analyzes the arbitration legislation and judicialpractices of various countries from a comparative perspective, with aview to get a systematical and comprehensive analysis of the issue ofextension of arbitration agreement, including who should decide theextension, what law and legal theory should be applied to settle thisissue. Finally, this paper envisages the current situation of Chineselegislature and judicial practice, and bring forward personalopinions and suggestions as to the extension of arbitration agreement.