Binding Force Of The International Commercial Arbitration Agreement On A Third Party

Compared with international civil litigation, international commercial arbitrationhas gained more popularity among international business men for its uniqueadvantages of autonomy, privacy and efficiency. But with the development ofeconomy and trade and the spread of electronic communication technology, as well asthe tendency of the complexity and expansion of the participators in business process,the change of the actual subject that entitle the rights and burden the obligation in thecontract has arisen, which bring about the subjects involved in relevant disputes arenot always consistent with the parties concluding the contracts.In the field of traditional international commercial arbitration, written arbitrationagreement is the origin of the jurisdiction of the arbitral tribunal, i.e. the partiesmutual agree to arbitrate through conclusion of the arbitration agreement. Under thetraditional arbitral philosophy, only the parties that have concluded the arbitrationagreement are entitled to participate in arbitration procedure. If the non-signatories ofthe arbitration agreement are not allowed to join in the arbitration procedure, thereasonable expectation of the parties of the contract will be impaired and thearbitration award will be unfair under the following circumstances: thenon-signatories substantially participate in the business process, or the non-signatoriesare the third-party beneficiary of the contract, or the non-signatories are whom the parties of the contract assign the rights and obligations thereof to. The non-signatoriesof the arbitration agreement shall be granted to be entitled to take part in thearbitration procedure under these specific circumstances. The discussion of the thirdparty of arbitration, triggered by the needs of the arbitral practice, and its systemstructure are what we must face with in the arbitration development. In considerationthat the consensus of third party of arbitration has not been reached among theinternational society, and we have not formed the system of third party of thearbitration, this article is based on the frontier and practical issue and opens up theelaboration as follows:Chapter I briefly illustrates the origin of the force of commercial arbitrationagreement, the obstacles of whose expansion has been broken through in theory andin practice. Chapter II is aimed to explain by legal principle the situation where theexpansion of the force of the arbitration agreement could happen, fully states that theapplication of the expansion of the force of the arbitration agreement conforms to themutual expectation of the parties of the contract or the protection of the legitimateinterests of the third party or the safeguard of the value of social fairness and justice,therefore the force of the arbitration agreement shall not be limited to the signatoriesin all circumstances.Chapter III, based on the aforesaid two chapters, introduces the practice of theinternational commercial arbitration with regards to the expansion of the force of thearbitration agreement. We can see from the situation and the standard where and howthe expansion of the force of the arbitration agreement could be applied in theirarbitral awards, in addition, the relationship of the expansion of the force of thearbitration agreement and the traditional arbitral theory is coordinative with eachother rather than repulsive. Both of them drive the development and improvement ofthe arbitration system.Chapter IV shows the relationship of the third party of the arbitration agreementand the third party of the arbitration, and elaborates on the necessity and feasibility ofstructuring the system of the third party of the arbitration. Also the introduction,analysis and comparison of the current regulations of the third party of the arbitration in the international world, which helps us to obtain the general idea of the legislativemode and development tendency of the third party of arbitration.Finally, Chapter V is back to the structure of the third party of arbitration of ourown, and illustrates that it is the needs of arbitral practice and the improvement ofarbitration system that require the system of the third party of arbitration shall beestablished. The unbalanced choice between the feature of the arbitration and thevalue of the arbitration, imperfect legislative philosophy and technology are theobstacles that we must overcome before structuring the system of the third party ofthe arbitration, notwithstanding the aforesaid disadvantages, we still have someadvantageous factors for us to promote and structure the system of the third party ofthe arbitration. And it is of the significant essence to promote and support thedevelopment of arbitration.