Group Arbitration In International Commercial Arbitration

Class Arbitration(also called Classwide Arbitration or Group of Arbitration)can be said to be a new type of arbitration compared with traditional arbitration.To a certain extent,class arbitration is based on the theory of group litigation..The purpose of setting up a group arbitration system is to be able to pool all parties that share common aspirations and enjoy common interests,and to obtain maximum legal protection for the aforesaid parties in the most cost-effective and efficient manner.Southland Corp V.Keating was the first case to resolve the first applicable group arbitration in the multi-party dispute practice.The California public heard the first occurrence of the term “corporate group” in this case,and the group arbitration system appeared.The Supreme Court of California held that the large number of7-11 dealers represented by Keating could be adequately considered as a “group” because of the large number of people.Therefore,they made a ruling on compulsory arbitration.In the Dow Chemical case,the ICC arbitral tribunal first elaborated on the concept of“group of companies”,and also elaborated on the four companies of the applicant as independent legal entities but in fact constituted “the same economic entity”(Reason for single economical reality.Not only that,the arbitral tribunal also separately detailed the legal basis for its jurisdiction over this case.Since then,"Corporate Group Arbitration" has officially entered the public's line of sight.If the preconditions for “corporate group arbitration” are met,even if some members of the company group do not enter into an arbitration clause with the counterparty of the contract,the effectiveness of the arbitration agreement or arbitration clause may also be extended to the members of the unsigned company group.In practice,it is of course necessary for an arbitral institution to apply the “corporate group arbitration”.First of all,there must be a fact that the parties to the arbitration clause in the arbitration agreement or agreement belong to a company group and have an associated relationship with the non-signatory party.But just having this fact is not enough.In order to extend the effect of arbitration agreements or arbitration clauses previously agreed between members of the company group with others to unsigned company group members,a more important prerequisite is that the unsigned members within the company group actually and effectively participated in all stages of the contract,including But not limited to the negotiation,conclusion,performance and termination stages.On the one hand,the fact thatunsigned members within the company group have substantially participated in the various stages of the contract can prove the existence of a de facto "same economic entity." The more important role is that it can independently prove that the company's group members have actually agreed to be arbitrated.The agreement or the arbitration clause contained therein is binding.Conversely,even if there is a fact that the party signing the arbitration agreement or arbitration clause and the fact that it constitutes a “corporate group” for the signatory party,the unsigned members of the company group did not substantively participate in any stage of negotiation,conclusion,performance or termination of the contract.Therefore,the lack of necessary rationality and legitimacy of its acceptance of arbitration agreements or arbitration clauses.Of course,the arbitration institution does not have the right to directly apply the "corporate group arbitration" established in the "Dow Chemical Case."Therefore,in the first part of this article,we first introduced the emergence and development of "group arbitration." By understanding the connotation of group arbitration,it is elicited as an independent form of group arbitration,that is,the emergence and status of“corporate group arbitration”.In the second part,this article emphasizes the main body of "corporate group arbitration",that is,the concept of "corporate group".In the third part,this article analyzes in detail the other necessary condition for the application of "corporate group arbitration",namely the fact of "substantive participation".In the fourth part,combined with the arbitration practice of today's international subjects,the focus of this paragraph of research is to analyze the status of the application of "corporate group arbitration" in arbitral proceedings and the significance of applying the theory.