Non-Signatories and International Arbitration in the United States: the Quest for Consent

Abstract

For many years arbitration practitioners have grappled with the problem of what to do with a ‘non-party’ – or more particularly a ‘non-signatory’1 – to the arbitration agreement that is nevertheless integral to the resolution of the dispute that has arisen. To take a simple example, what of the corporate affiliate that has been assigned certain rights and obligations under a subsequently disputed contract: can the affiliate assignee be compelled to arbitrate; can it commence arbitration itself and can it somehow intervene in an arbitration initiated between the original contracting parties? At the heart of these questions lies the widely-accepted principle that arbitration is by its nature consensual. However, in the absence of an agreement containing an arbitration clause and bearing the affiliate assignee's signature, where does one look to find evidence of such consent to arbitration? Far from being merely theoretical, the questions raised by the aforementioned scenario are in fact highly relevant to the contemporary practice of international commercial arbitration. Disputes involving non-signatories are inevitable in the context of modern international business transactions that typically involve complex webs of interwoven agreements, multilayered legal obligations and the interposition of numerous, often related, corporate and other entities. Accordingly, while the non-signatory ‘problem’ has long been associated with disputes arising out of bills of lading and construction sub-contracts, it is today to be found in such diverse contexts as arbitrations concerning reinsurance agreements, Internet-based software licences and investment treaties. Perhaps reflecting an increased awareness of this issue, there is a growing body of commentary on the topic.2 Bearing in mind the volume and breadth of these writings, this article does not attempt to produce an exhaustive analysis of all aspects of the treatment of non-signatories in international arbitration. Rather, focusing largely on the current position in the United States, …